Question: When calculating a present value, the higher the discount rate, the lower the present value of the future cash flows. True False

When calculating a present value, the higher the discount rate, the lower the present value of
the future cash flows.
True
False
When calculating a present value, the higher the discount rate, the

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:

Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no...

Q:

The higher the discount rate, the lower the present value of a dollar. True False

Q:

A multinational corporation (MNC) can be valued in a similar manner to that of a domestic firm -- by calculating the present value of expected future cash flows. However, for an MNC, the expected...

Q:

Holding all other variables constant, payment per period for an annuity due will be higher than an ordinary annuity. True False 3. As the discount rate increases, the present value of future cash...

Q:

Which of the following statements is true regarding the relationship between Weighted Average Cost of Capital ( WACC ) and Discounted Cash Flow ( DCF ) valuation? Question 1 0 Answer a . WACC has no...

Q:

Mark the following question as true or false, if false explain why 2. Cash on cash returns are preferred when measuring returns for illiquid investments since it accounts for the time value money...

Q:

Canvas X COD Question 3 1 pts Financial markets can be classified by the type of asset traded into dealer market and ouction market True False Question 4 1 pts Three fundamental issues separate net...

Q:

Global Industries Inc. (GII), a US conglomerate, has a debt-to-equity ratio of and a WACC of . At this level of leverage, GII's debt is risk-free and it constantly rebalance its debt to maintain a...

Q:

Global Industries Inc. (GII), a US conglomerate, has a debt-to-equity ratio of 0.3 and a WACC of 10%. At this level of leverage, Gil's debt is risk-free and it constantly rebalance its debt to...

Q:

Which of the following is NOT a definition of yield to maturity? Answer a) return that an investor will earn if they buy the bond for its market price and hold it until maturity b) investors'...

Q:

If project A has a lower payback period than project B, this may indicate that project A may have a 0 higher NPV and be less protable. 0 lower NPV and be less protable. 0 lower NPV and be more...

Q:

What are the Miller indices of the {110} slip planes in BCC unit cells that include the [111] slip direction?

Q:

Adam Smith's four canons of taxation are: equity, efficiency, certainty, and convenience/simplicity. Use these canons as a framework to explain whether the personal property sales legislation (CB 3,...

Q:

Which of the following components are included in the measurement of lease liability at the commencement date under AASB 1 6 ? A . Residual value and the cost of restoring the underlying asset B ....

Q:

A company issues 1,050 shares of its common stock for $33,600 cash. Prepare journal entries to record this event under each of the following separate situations.