Which of the Following Changes Would Increase the Present Value

question 35

Multiple Choice

Which of the following changes would increase the present value of a future payment?

• A)an increase in the size of the payment
• B)an increase in the time until the payment is made
• C)an increase in the interest rate
• D)All of the above are correct.

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Definitions:

Output

Output refers to the quantity of goods or services produced by a firm, industry, or economy within a certain period.

Increasing Returns

An economic principle where a proportionate increase in inputs leads to a greater proportionate increase in outputs, typically seen in production processes.

Constant Returns

A situation in production where increasing the inputs by a certain proportion results in an increase in output by the same proportion.

Input Prices

The costs associated with the purchase of the materials, labor, and other inputs required for the production of goods or services.