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
Section: Chapter Questions
Problem 1PS
Related questions
Question

Transcribed Image Text:Lowering the discount rate on a cash flow will ______ its present value.
- A. decrease, then increase
- B. increase, then decrease
- C. decrease
- D. increase
Expert Solution

Step 1
Discount Rate:
- It is the rate at which the cash flows over the period are discounted.
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