Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? -Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return.   -Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return.     Which of the following investments that pay will $18,000 in 4 years will have a lower price today? -The security earns an interest rate of 4.00%.   -The security earns an interest rate of 6.00%.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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4. Present value

Finding a present value is the reverse of finding a future value.
Which of the following is true about finding the present value of cash flows?
-Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return.
 
-Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return.
 
 
Which of the following investments that pay will $18,000 in 4 years will have a lower price today?
-The security earns an interest rate of 4.00%.
 
-The security earns an interest rate of 6.00%.
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