Other Factors Constant, the Present Value Will Be Larger

question 46

Multiple Choice

Other factors constant, the present value will be larger:

• A) The smaller is the future value
• B) The higher is the interest rate
• C) The larger is the number of periods t
• D) The shorter is the time period t

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Definitions:

Average Collection Period

A metric that calculates the average time taken to receive payments from customers, indicating the efficiency of a company's credit and collection policies.

Days' Sales In Inventory

A financial metric indicating the average number of days that a company holds its inventory before selling it.

Full-Capacity Level

The maximum level of output a company can produce and sell with its current resources and without incurring significant additional costs.

Operating Capacity

The maximum amount of work that an organization can complete in a given period under normal circumstances.