You Have Just Calculated the Present Value of the Expected

question 11

Multiple Choice

You have just calculated the present value of the expected cash flows of a potential investment.Management thinks your figures are too low.Which of the following actions would improve the present value of your cash flows?

• A)extend the cash flows over a longer period of time
• B)increase the discount rate
• C)decrease the discount rate
• D)extend the cash flows over a longer period of time, and decrease the discount rate

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Definitions:

Social Regulation

Consists of policies and rules designed to correct behaviors that are not in the best interest of society, including environmental protection and worker safety.

Safety

The condition of being protected from or unlikely to cause danger, risk, or injury.

Harmony

A state of peacefulness or agreement in feelings, actions, ideas, or interests among individuals or groups.

Antitrust Laws

Legislation enacted to prevent monopolies, promote competition, and ensure fair business practices in the marketplace.