You Are Scheduled to Receive $10,000 in One Year

question 33

Multiple Choice

You are scheduled to receive $10,000 in one year. What will be the effect of an increase in the interest rate on the present value of this cash flow?

• A) It will cause the present value to fall.
• B) It will cause the present value to rise.
• C) It will have no effect on the present value.
• D) The effect cannot be determined with the information provided.

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