Asked by
Anjali Moria
on Oct 14, 2024
Verified
An increase in the interest rate will necessarily result in a decrease in the present value of a given stream of positive incomes.
Present Value
Today's value of future money or cash flow sequences, calculated using a certain rate of return.
Interest Rate
The percentage at which interest is charged or paid for the use of money over a period of time.
Positive Incomes
Situations or instances where individuals or entities receive or earn money, representing an increase in financial resources.
- Become familiar with the concept concerning the present value of future cash flows.
Verified Answer
KP
Learning Objectives
- Become familiar with the concept concerning the present value of future cash flows.