When the Discount Rate

question 7

Multiple Choice

When the discount rate:

• A) increases, the present value of a future cash flow decreases.
• B) increases, the present value of a future cash flow increases.
• C) decreases, the present value of a future cash flow will remain the same.
• D) decreases, the present value of a future cash flow decreases.

---

Definitions:

Experiment

An organized experiment designed for the purpose of exploring new knowledge, evaluating a supposition, or confirming a recognized fact.

Random Assignment

A method used in experiments to assign participants to different groups using randomization, ensuring each participant has an equal chance of being assigned to any group.

Experimental Research

A systematic and scientific approach to research in which the researcher manipulates one or more variables to observe the effect on some behavior or mental process.

Survey

A method of gathering information from a sample of individuals through questions to generalize findings to a larger population.