3. Present value 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 how much you need to invest today so that it grows toa given future amount at a specified rate of return. O Finding the present value of cash flows tells you what a cash fiow will be worth in future years at a specified rate of return. Which of the following investments that pay will $12,000 in 15 years will have a higher price today? The security that earns an interest rate of 4.00%. The security that earns an interest rate of 6.00%. 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 6.80%. 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 four years O An investment that matures in three years Which of the following is true about present value calculations? O Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases O Other things remaining equal, the present value of a future cash flow increases if the investment time period Increases