As the Interest Rate Rises,the Present Value of a Given

question 42

Multiple Choice

As the interest rate rises,the present value of a given perpetual stream of income

• A) increases.
• B) decreases.
• C) does not change.
• D) approaches infinity.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including rent, salaries, and insurance costs.

Total Revenue

The overall amount of money generated by a business from its sales of goods or services, calculated by multiplying the price per unit by the number of units sold.

Variable Costs

Costs that change in proportion to the level of output or activity.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, wages, and debt repayments.