Using Higher Discount Rates Will

question 32

Multiple Choice

Using higher discount rates will:

• A) not affect the present value of the future cash flow.
• B) increase the present value of any future cash flow.
• C) decrease the present value of any future cash flow.
• D) None of the above.

Apply economic principles to group dynamics and productivity.

Calculate and interpret average, marginal, and total costs.

Assess cost-benefit scenarios in business operations.

Apply principles of economics to personal financial decisions.

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Definitions:

Certificates Of Deposit

A type of federally insured savings account that has a fixed interest rate and fixed date of withdrawal, known as the maturity date.

Compounded Quarterly

The process of calculating interest on both the initial principal and the accrued interest over four quarters in a year.

Semi-annually

Occurring twice a year, typically used in the context of payments, compounding, or reporting periods.

Interest Rate

The ratio of interest a borrower must pay to a lender for using their money.