Which of the Following Is Associated with an Increase in the Discount

question 31

Multiple Choice

Which of the following is associated with an increase in the discount rate?

• A) It will increase the present value of future cash flows.
• B) It will have no effect on net present value.
• C) It will reduce the present value of future cash flows.
• D) It is one method of compensating for reduced risk.

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Definitions:

Triangular Model

Often refers to the Triangular Theory of Love, which outlines three components of love: intimacy, passion, and commitment.

Compassionate Love

A form of love characterized by mutual respect, attachment, and affection, with a strong focus on caring for the well-being of the other person.

Social Exchange Theory

A theoretical perspective that explains social behavior in terms of an exchange process, aiming to maximize benefits and minimize costs in relationships.

Economic Model

An abstract representation of economic processes, relationships, and theories used to predict or understand economic behaviors and outcomes.