The higher the interest rate, the lower the present value of a future amount. Why?
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (12 reviews)
Present values are less when discount rates are high as compared to when th...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Question Posted:
Students also viewed these Accounting questions
-
What is meant by the present value of a future amount? What is the general equation for present value?
-
How is the present value of a future payment calculated?
-
As the discount rate increases, the present value of a given future cash flow also increases. Do you agree? Explain.
-
Lopez Company uses a job order cost accounting system that charges overhead to jobs on the basis of direct material cost. At year-end, the Goods in Process Inventory account shows the following. 1....
-
What do the Laws, Divine, Moral, and Martial reveal about Colonial Virginia's realities and priorities? What does the list of crimes and punishments reveal about early seventeenth century's values...
-
According to a study by Nielsen Mobile, Teenagers ages 13 to 17 are by far the most prolific texters, sending 1742 messages a month. Mr. Williams, a high school statistics teacher, was skeptical...
-
Explain the idea behind the BDI architecture. Why do you think this architecture is particularly appealing to human researchers?
-
These financial statement items are for Barfield Corporation at year-end, July 31, 2014. Salaries and wages payable........... $ 2,080 Salaries and wages expense.......... 57,500 Supplies...
-
Explain how culture can be used to generate a competitive advantage in a multinational organization.?
-
An EM wave propagating in a certain medium is described by E = 25 sin (2 10 6 t 6x) a z , V/m (a) Determine the direction of wave propagation. (b) Compute the period T, the wavelength , and the...
-
Dennis Company currently depreciates its assets using the straight-line method for both tax and financial accounting. Total depreciation expense for this year will be $250,000 using straight-line...
-
What is an annuity? Discuss.
-
(a) Identify the key assertion at risk for payables in relation to payments made prior to receipt of goods. (b) For the control procedures (1) to (5) above for payables: i. Identify the key...
-
The international product life cycle theory says that a company will begin by exporting its product and later undertake what as the product moves through its life cycle?
-
What are the benefits of international trade?
-
For the year ended June 30, 20X7, the trust fund should report investment earnings of a. $80,000. b. $50,000. c. $85,000. d. $35,000. On August 1, 20X6, the City of Rockhaven received $1,000,000 from...
-
What is meant by the term Leontief paradox?
-
What are some limitations of the international product life cycle theory?
-
McCutchon wrote a check payable to cash while he was in a supermarket. Before he got to the cashier, he realized that he had lost the check. Is this a bearer instrument, payable to any holder?
-
The figure shows six containers, each of which is filled from the top. Assume that water is poured into the containers at a constant rate and each container is filled in 10 seconds. Assume also that...
-
Which of the following is a general property of a basic solution? (a) Tastes bitter (b) Turns litmus paper blue (c) pH less than 7 (d) Neutralizes a base.
-
Sports Biz, a profitable company, built and equipped a $2,000,000 plant brought into operation early in Year 1. Earnings of the company (before depreciation on the new plant and before income taxes)...
-
Assume that a machine costing $300,000 and having a useful life of five years (with no salvage value ) generates a yearly income before depreciation and taxes of $100,000. Required: Compute the...
-
Among the crucial events in accounting for property, plant, and equipment are acquisition and disposition. Required: a. What expenditures should be capitalized when a company acquires equipment for...
-
The following are extracted from the Cash Book of Jungle Trading and its Bank Statement (received from ABC Bank) for the month of April 2020: Cash Book April 2020 RM April 2020 1 Bal b/d 1,500 9...
-
1. Briefly describe FIVE (5) differences between qualitative data and quantitative data. 2. The literature review is an integral part of the research process and make a valuable contribution to...
-
Writing a detailed written assessment that challenges the traditional legal regimes governing the use of military force, addressing key jus ad bellum and jus in bello legal concerns along with their...
Study smarter with the SolutionInn App