Which of the Following Statements Are Correct Concerning Present Value

question 125

Multiple Choice

Which of the following statements are correct concerning present value?
I. The present value interest factor for a single sum is always equal to or less than 1.
II. The lower the discount rate for a given year, the smaller the present value interest factor.
III. The further in time, the smaller the present value interest factor.
IV. The present value is equal to the future value only when the stated interest rate is 1%.

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, III and IV only

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Definitions:

Negligent Act

An action or failure to act in a situation where a person has a duty to exercise reasonable care, resulting in harm to another party.

Proportionate Negligence

A legal doctrine that allocates damage recovery based on the degree of fault or negligence contributed by each party involved in an incident.

Liability for Injuries

The legal responsibility to compensate for physical harm or injury caused to another person.

Duty of Care

A legal obligation imposed on individuals and organizations to adhere to a standard of reasonable care while performing any acts that could foreseeably harm others.