Present Value
6 practice questionsFinanceStep-by-step solutions
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1
All else equal, the present value of a future cash flow is higher when the discount rate is:
A.Higher
B.Lower
C.Exactly 100%
D.Negative infinity
2
Present value discounts future cash flows to reflect what idea?
A.Money today is worth more than the same amount later
B.All cash flows are worthless
C.Future cash is always larger
D.Interest rates do not matter
3
The present value of $1,100 to be received in 1 year, discounted at 10%, is:
A.$1,000
B.$1,100
C.$990
D.$1,210
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