The Present Value of a Single Sum

question 81

Multiple Choice

The present value of a single sum

• A)increases as the discount rate decreases.
• B)decreases as the discount rate decreases.
• C)increases as the number of discounting periods increases.
• D)increases as the discount rate increases.
• E)none of the above.

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Definitions:

National Monetary Unit

The primary currency of a country, used as a medium of exchange and basis for trade.

Purchasing Power

The value of currency expressed in terms of the amount of goods or services that one unit of money can buy.

Transaction

An exchange between a business and one or more external parties to a business or a measurable internal event such as the use of assets in operations.

Exchange

A marketplace where securities, commodities, derivatives and other financial instruments are traded.