The Reason That a Discount Factor in Year 3 Is

question 86

Multiple Choice

The reason that a discount factor in Year 3 is less than a discount factor in Year 2 is that

• A) cash flows are uneven.
• B) compounding does not occur.
• C) cash flows are even.
• D) present value is positive.
• E) a dollar received in 3 years is worth less than a dollar received in 2 years.

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Definitions:

Wernicke's Area

A region of the brain that is important for language development, located in the temporal lobe on the left side of the brain.

Temporal Lobe

A region of the cerebral cortex involved in processing auditory information and is also important for memory and emotion.

Language Comprehension

The ability to understand spoken, written, or signed language through the processes of decoding, interpreting, and making sense of the messages.

Pituitary Gland

A small, pea-sized gland located at the base of the brain, often referred to as the "master gland" because it controls the functions of many other endocrine glands.