Attention: Due to a bug in Google Chrome, this page may not function correctly. Click here to learn more 3. Present value Aa 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. O 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 $19,000 in five years will have a higher price today? O The security that earns an interest rate of 14.50%. The security that earns an interest rate of 21.75%. 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 nine years O An investment that matures in eight 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