If We Use Future Value Rather Than Present Value to Decide

question 36

Multiple Choice

If we use future value rather than present value to decide whether to make an investment:

• A)we will make a bad decision,since the future value will always be higher if the discount rate is positive.
• B)we will make a bad decision,since the future value will always be lower if the discount rate is positive.
• C)we will make the same decision using either future value or present value.
• D)There is not enough information given to answer the question.

---

Definitions:

Industry Output

The total production of goods and services produced by a specific sector of the economy over a given period.

Marginal Cost

The cost incurred from producing one additional unit of a good or service.

Fixed Cost

Costs that do not vary with the level of production or sales, remaining constant regardless of the amount of goods or services produced.

Crude Oil Price

The cost per barrel of unrefined petroleum, a key determinant of energy costs, affecting global economies.