The Lower the Discount Rate, the Lower the Present Value

question 88

True/False

The lower the discount rate, the lower the present value of a future cash flow.

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Definitions:

Future Event

An occurrence or situation that has not yet happened but is expected or likely to occur.

Withholding Allowances

Exemptions claimed by employees to reduce the amount of income tax withheld from their paychecks.

Income Tax

A tax that governments impose on financial income generated by all entities within their jurisdiction.

Withholding Allowance Certificate

A form used by employees to indicate their tax status to employers, determining how much federal income tax to withhold from their earnings.