2. Present value Aa Finding a present value is the reverse of finding a future value Which of the following is true about finding the present value of cash flows? O Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. Which of the following investments that pay will $15,000 in four years will have a lower price today? O The security that earns an interest rate of 13.00%. The security that earns an interest rate of 19.50%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of holding the security is 9.60%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options will exhibit the lower price? O An investment that matures in nine years O An investment that matures in eight years Which of the following is true about present value calculations? Other things remaining equal, the present value of a future cash flow increases if the investment time period increases Other things remaining equal, the present value of a future cash flow decreases if the investment time periocd increases