Which of the Following Changes Would Decrease the Present Value

question 35

Multiple Choice

Which of the following changes would decrease the present value of a future payment?

• A)an increase in the size of the payment
• B)an increase in the time until the payment is made
• C)a decrease in the interest rate
• D)All of the above are correct.

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Definitions:

Annual Rate

The interest rate for a whole year as opposed to a shorter period, commonly used in finance to compare the returns on investments or the cost of loans.

Charlie Company

A designation often used in military or tactical settings to refer to the third company in a given sequence, but may not have a widely recognized definition outside such contexts.

Anticipated Rate

The expected rate of return or interest rate foreseen on an investment or loan.

Investors

are individuals or entities that allocate capital with the expectation of receiving financial returns, involving various levels of risk and investment types.