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 telis you how much you need to invest today so that it grows to a given future amount at a ispecified rate of reture. Finding the prerent value of cash flows tels 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 $15,500 in 8 years will have a lower price today? The secarity that earns an interest rate of 5,50%. The securlty that earns an interest rath of 1.25% Eic wants to invest in government securities that promise to pay s1,000 at maturity. The opportunity cost (interest rate) of holding the security is 6.80\%. Ascuming that both irivestments have equal risk and Erich investment time horizon is fleodble, which of the following investment options will extribit the lower price? An investrsent that matures in five years An investrent that matures in six years Which of the foliowing is true about present value calculations? Cther things remaining equal, the present value of a future cash flow increases if the discount rate increases, Other things renvalining equal, the present value of a future cash flow decreases if the discount rate increases