kiannafrazier7644 kiannafrazier7644

22-07-2020
Business

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As the discount rate applied to a single amount (lump sum) future value increases, the present value __________________.

Respuesta :

ewomazinoade ewomazinoade

24-07-2020

Answer:

Decreases

Explanation:

present value is the sum of discounted cash flows.

as interest rate increases, which is used in discounting cash flow,present value decreases.

for example, the present value of $10 one year from now with a 10% discount rate is $9.09

when discount rate is 12%, it becomes $8.92

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