Asked by
Nafisha Khanom
on Dec 12, 2024
Verified
As the present value of the future earnings from owning an asset ____, the market value of the asset ____.
A) decreases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; is uncertain
Present Value
The today's value of future money or cash flows, determined by applying a chosen rate of return.
Market Value
The current price at which an asset or service can be bought or sold in an open market.
Future Earnings
The projected income a company or individual is expected to generate in upcoming periods.
- Understand the significance of the present value concept in making investment decisions.
- Comprehend the process through which the market value of assets is influenced by anticipated future earnings.
Verified Answer
JB
Learning Objectives
- Understand the significance of the present value concept in making investment decisions.
- Comprehend the process through which the market value of assets is influenced by anticipated future earnings.