When Discount Rate

question 3

Multiple Choice

When 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.

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Definitions:

Ethanol

A colorless, flammable liquid, commonly known as alcohol, used in beverages and as a solvent and fuel.

Carbon Compounds

Organic compounds that contain carbon atoms and typically hydrogen, possibly along with other elements.

Phenylacetone

An organic compound with the chemical formula C6H5CH2COCH3, known as a precursor in the synthesis of methamphetamine and amphetamine.

Toluene

A colorless, water-insoluble liquid hydrocarbon of the aromatic series, used as a solvent and in the manufacture of various chemicals.