As the Present Value of the Future Earnings from Owning

question 81

Multiple Choice

As the present value of the future earnings from owning an asset ____, the market value of the asset ____.

• A) decreases; increases
• B) increases; decreases
• C) decreases; decreases
• D) decreases; is uncertain

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Definitions:

Temporary Investment

Short-term investments made with the intention of converting them into cash within a short period, usually one year or less.

Long-Term Investment

Financial investments that are not expected to be liquidated within a year and are held for growth, income, or speculative purposes.

Investor's Income

The income earned by an investor from their investment portfolio, including dividends, interest, and capital gains.

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee but does not have full control.