How is discounting used in the context of present values and future values? O To reduce a present amount to its future value O To increase a present amount to its future value O To increase a future amount to its present value OTo reduce a future amount to its present value

Q: Present value is a. the value now of a future amount. b. the amount that must be invested now to…

A: Present Value: It states that the value of  money today is worth more than the same amount of money…

Q: TRUE / FALSE The discount rate used to discount the value of future dollars can generally be…

A: The present value of an investment is the value of all future cash flows that have been discounted…

Q: What is the concept of present value? What is discounting?

A: Present value means value of future cash flows in todays terms.

Q: a present value is converted to a future value through compounding, explain this to me.

A: Present value (PV) is the amount of money one is having today. Future value (FV) is how much money…

Q: What is the concept of present value? How does it affect inflation

A: Increase in general price levels in an economy is known as inflation. Due to inflation, the cost of…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: What effect do interest rates have on the calculation of future and present value? How does the…

A: The time value of money is a concept that is based on the idea that a given amount of money is worth…

Q: o you think a person would opt to use the Payback Period Method instead of the Net Present Value or…

A: Given information : . NPV refers to the difference between the sum of the present value of expected…

Q: The present value of a future amount: a. will always be less than the future amount b. can be…

A: Present value = Future value / (1+i)^twherei = discount ratet = number of periods

Q: What happens to a future value is you increased the rate, r? What happens to a present value?

A: When the interest rate increases, the future value of a sum now will increase. This is because the…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: ding to the time value of money concept, also referred to as the present discounted value, is based…

A: Time value of concepts as the time period goes on due to the inflation goes on increasing and hence…

Q: which of the following is necessary to solve a discount problem?   a.future amount   b.interest…

A: In a discounting problem, the present value of future cash flow is calculated. In order to…

Q: Define Present value and future value. If present value and future value are equal what is the rate?…

A: The time value of money is an important concept in finance which states that the money a person…

Q: How Net present value, interest rate, and benefit change if cost increases.

A: Net present value means difference between present value of the cash inflows and present value of…

Q: Why inflation is considered and have effect in present value?

A: Inflation is the increase in the general price level of the country. It is an important indicator of…

Q: An decrease in the interest rate will: Multiple select question. increase the future value…

A: Interest rate and future value has direct relationship. A increase in interest rate will lead to…

Q: When does the present economy studies do or use? a. When interest rate is not given b. When time…

A: Economy studies is defined as the study, which used to provide the framework as well as the ten most…

Q: How does discounting, as used in determining present value, relate to compounding, as used in…

A: Future value equals the value of a deposit made today at a future date. Present value equals the…

Q: 4. What is present worth? Group of answer choices Difference of future worth and interest Amount of…

A: Let's assume P = Present worth and F = Future worth n = Duration r = Interest rate

Q: why does an increase in the discount rate resuce the present value?

A: This relates to the concept of time value of money. We do discounting when present value needs to be…

Q: Explain the difference between future value and present value. Why is future value a good thing to…

A: Time value of money is a finance concept which states that actual the value of money will depend on…