Discounting a future cash flow at 15 percent results in a lower present value than does discounting

Question:

Discounting a future cash flow at 15 percent results in a lower present value than does discounting the same cash flow at 10 percent. Explain why.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

See More Books

Question Posted: Jun 10, 2016 05:33 AM

See More Questions

What nonfinancial considerations should be taken into account regarding a proposal to install a fire sprinkler system in a finished goods warehouse?
Explain the rules of debit and credit with respect to transactions recorded in revenue and expense accounts.
Five account classifications are shown as column headings in the table below. For each account classification, indicate the manner in which increases and decreases are recorded (i.e., by debits or...
Dominic and Magalie have been married for five years and have thes children, aged four, seven and nine. Dominic and Magale are diverong and Magalie has been ordered to pay child support, until the...
Is the consumer decision process a rational one, an emotional one or some combination of the two?
Use the following information and solve the questions Input Trek, Inc. Income Statement for 2021 Sales COGS Other expenses Depreciation EBIT Interest Taxable income Taxes (21%) Net income...
Hitting a door with your bare fist hurts more than hitting a sofa cushion. In work terms, explain why this is so. $\cdot$
Ruths Chris Steakhouse is the largest upscale steakhouse company in the United States, based on total company- and franchisee-owned restaurants. The companys menu features a broad selection of high...
4 16. The mean and variance of a binomial distribution area and respectively. If P(X = 1) = then P(X = 4 or 5) is equal to: 243 (a) 1/159 64 (b) $ 16 (c) 81 925 145 (d) 27 243 17. Let E1, E2, E3 be...
Kessler Brothers produces products for farms and ranches. The administrative and manufacturing operations occupy the same 240,000-square-foot building. The manufacturing plant uses 180,000 square...
What is the major shortcoming of using the payback period as the only criterion in making capital budgeting decisions?
What is the definition of interest?
Enter the following transactions in sales (journal) book of M/s.Bansal electronics: 2014 September 01 22 28 Sold to Amit Traders as per bill no.4321 20 Pocket Radio @ 70 per Radio n 2, T.V. set, B&W....
3. Identify the errors in the following Java program and rewrite the program without errors(10 Marks) a. public class JavaDemo { public static main(String[]args) { System.out.println("Hello World...
This question concerns the stability of an existing slope next to a canal after an additional 2m thick fill material is proposed to be placed on top of the existing ground level as shown in Figure 1...
4. Have you ever laughed at a joke or a media depiction that you have then had second thoughts about later on? If so, describe the situation the best you can. If not, have you have laughed at a...
Use the following information to calculate the dollar cost of using a money market hedge to hedge 2,000,000 pounds of payables due in 180 days. Assume the company has no cash. Assume the spot rate...
The CFO of Bunyan Lumber Corporation, Anita Rai has decided to invest some money in the financial market to diversify the risks of business operations and increase rate of return. She has been...
The financial statements for Falls Ltd for the year ended 31 May 2014 were as follows. Additional information: Dividends paid during the year: $30,000 Retained earnings ell June 2013: $168,000. a....
Continuation of Exercise 4-83. (a) What is the probability that the first major crack occurs between 12 and 15 miles of the start of inspection? (b) What is the probability that there are no major...
On September 1, 2011, Park Rapids Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are...
The following items were taken from the accounting records of Minnesota Satellite Telephone Corporation (MinnSat) for the year ended December 31, 2011 (dollar amounts are in thousands): Accounts...
As of December 31 of the current year, Chernin Corporation has prepared the following information regarding its liabilities and other obligations: Notes payable, of which $10,000 will be repaid...
According to the context, what is changing HR Professionals' ability to track talent costs?
Have a look at the SuperChem VR company's Chemistry Lab Simulator. The owner of SuperChem VR is preparing his pitch deck for an important investor. He aims to expand his AR/VR services company in the...
What led the Department of Health and Human Services and CMS to implement a new prospective payment system across all types of care?

Discounting a future cash flow at 15 percent results in a lower present value than does discounting

Question:

Step by Step Answer:

The present value of a future amount is the amount of money which if invested today to earn ...View the full answer

Financial and Managerial Accounting the basis for business decisions

Related Video

Students also viewed these Corporate Finance questions