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? 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. 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. Which of the following investments that pay will $14,500 in 15 years will have a lower price today? O 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 11.00%. 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? An investment that matures in 10 years An investment that matures in nine years O Which of the following is true about present value calculations? 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. The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $21,936.95 seven years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 08.00% O 0.25% O 6.40% 5.83% If an investment of $35,000 is earning an interest rate of 12.00%, compounded annually, then it will take for this investment to reach a value of $49,172.48-assuming that no additional deposits or withdrawals are made during this time. Which of the following statements is true-assuming that no additional deposits or withdrawals are made? If you invest $1 today at 15% annual compound interest for 82.3753 years, you'll end up with $100,000. If you invest $5 today at 15% annual compound interest for 82.3753 years, you'll end up with $100,000