Using Lower Discount Rates Will

question 62

Multiple Choice

Using lower 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.

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Definitions:

Withdrawal

The act of removing funds from an account, or the act by an owner of taking assets out of a business for personal use.

Total Assets

The sum of all resources owned by a company having economic value, as reported on the balance sheet, including both current and long-term assets.

Total Capital

Total capital refers to the sum of a company's debt and equity, representing the total funds that a company can use for its operations, expansion, and investment activities.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting how much of the asset's value has been used up over time.