7. Present value Finding a present value is the reverse of finding a future value. Discounting is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future. Which of the following investments that pay will $17,500 in 8 years will have a lower price today? The security that earns an interest rate of 6.00%. O The security that earns an interest rate of 4.00%. 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 5.40%. 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 five 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. O Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases