Question $4$

$3$ pts

You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would lower the calculated value of the investment?

A$.$ The cash flows are in the form of a deferred annuity, and they total to $$100,000.$ You learn that the annuity lasts for only $5$ rather than $10$ years, hence that each payment is for $$20,000$ rather than for $$10,000.$

B$.$ The discount rate increases.

C$.$ The riskiness of the investment's cash flows decreases.

D$.$ The total amount of cash flows remains the same, but more of the cash flows are received in the earlier years and less are received in the later years.

E$.$ The discount rate decreases.