Because We Usually Assume Positive Interest Rates in Time Value

question 84

True/False

Because we usually assume positive interest rates in time value analyses,the present value of a three year annuity will always be less than the future value of a single lump sum,if the annuity payment equals the original lump sum investment.

---

Definitions:

After-Tax Net Income

The amount of profit a company has left after paying all its taxes.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, simplifying financial calculations.

Salvage Value

The envisaged monetary value of an asset when sold after its lifespan of utility.

Tax Rate

The percentage at which an individual or corporation is taxed.