In recent years, interest rates in several countries (e.g., Japan) have been negative, at least for certain
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In recent years, interest rates in several countries (e.g., Japan) have been negative, at least for certain kinds of investments. Glance back at Figure 5.6 and describe how the figure would look if the discount rate is negative?
Transcribed Image Text:
FIGURE 5.6 Present Value Relationship The present value of $1 falls when the discount rate is higher or number of periods is greater. Present Value of One Dollar ($) 1.00 0.75- 0.50 0.25 0246 0% 5% 8 10 12 14 16 18 20 22 24 Periods 10% 15% -20%
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Related Book For
Principles Of Managerial Finance
ISBN: 9781292400648
16th Global Edition
Authors: Chad Zutter, Scott Smart
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