Question: Explain intuitively why it is that present values decrease as the discount rate increases

Explain intuitively why it is that present values decrease as the discount rate increases

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

The exam consists of both short answer and quantitative questions. The short answers are just that "short". Typically 4 to 6 sentences (maximum) should be enough for a complete response. Some of the...

Q:

Explain intuitively why it is that present values decrease as the discount rate increases.

Q:

Explain intuitively why it is that present values decrease as the discount rate increases.

Q:

1. One thing lenders sometimes require when loaning money to a small corporation is an assignment of the ordinary shares as collateral on the loan. Then, if the business fails to repay its loan, the...

Q:

why present values decrease as the discount rate increases

Q:

All else being the same, which of the following statements is correct? Multiple Choice Present values increase as the discount rate increases I only. Present values are always smaller than future...

Q:

please do all corporate finance The concept that a dollar received today is worth more than a dollar received tomorrow is referred to as the: Select one: Oa. Simple interest value. O b. Future value...

Q:

Question 28 9 pts Net working capital is defined as: Fixed assets minus shareholders' equity. Total assets minus total liabilities, Total liabilities minus shareholders' equity. Current assets minus...

Q:

6. Which of the following is/are accurate? All else equal, I. present values increase as the discount rate increases II. present values increases the further away in time the future value is III....

Q:

Which of the following statement is true? The future value will decrease the longer the period of time. The larger the future value interest factor, the larger the future value. Interest earned on...

Q:

A W14 x 109 of 50 ksi steel, 16 feet long, is to be investigated for use as a beam-column in an unbraced frame. First-order analyses of the frame were performed for both the sway and the nonsway...

Q:

a. Insert a copy of your graph of the autocorrelation function (ACF) for the weekly closing stock prices data. b. On the basis of your ACF alone, state whether or not, the data are trended over time...

Q:

5. Suppose the cross-price elasticity of demand between goods X and Y is 2. How much would the price of good Y have to change in order to increase the consumption of good X by 50 percent? (LO1)

Q:

A junzi is _ _ _ _ _ _ _ _ . A . the natural state of human beings B . a person who is gracious, cultured, and prudent C . a person who is gracious, cultured, and magnanimous D . a person focused on...

Q:

2. All of the managers working for Danny Meyer are encouraged to hire employees that display natural warmth, optimism, empathy, a strong work ethic, and integrity. What interview methods would help a...

Q:

2. To learn more about the way you handle anger, record your anger responses in a journal for a period of five days. When anger surfaces, record as many details as possible. What triggered your...

Q:

c. What results did you experience from the way you handled this situation? Describe both positive and negative results.