If the Present Value of a Perpetual Income Stream Is

question 42

Multiple Choice

If the present value of a perpetual income stream is increasing, the discount rate must be ________.

• A) increasing
• B) decreasing
• C) changing unpredictably
• D) increasing proportionally

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Definitions:

Finished Goods

Items that have been completed by the manufacturing process, and are ready for sale to customers.

Ending Balance

The final amount in an account at the end of an accounting period, reflecting all transactions that occurred during that period.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that vary directly with production volume, such as utilities and raw materials.

Work in Process Inventories

Current assets that represent partially completed goods which are still in the production process.