Which One of the Following Will Increase the Future Value

question 39

Multiple Choice

Which one of the following will increase the future value of a finite stream of uneven cash flows? Assume a positive rate of return.

• A)Moving every cash flow one time period further into the future
• B)Decreasing the amount of each cash flow
• C)Increasing the first cash flow by $100 and lowering the last cash flow by $100
• D)Moving the Time 0 cash inflow to Time 1
• E)Decreasing the total number of cash flows

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Definitions:

Nonrivalrous Consumption

A consumption characteristic where one individual's use of a good does not reduce availability to others.

Marginal Cost

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

Simultaneous Consumption

A characteristic of services that indicates they are consumed at the same time as they are produced.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of production and the quantity of output increase.