Tom's Donuts can invest in a new espresso machine that costs $300 and will yield expected profits of $200 each year for two years. At lower interest rates, the present discounted value of profits from the investment

A) increases.
B) decreases.
C) is unchanged.
D) is indeterminate from the given information.

Present Discounted Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Expected Profits

Projected earnings calculated by estimating revenues and subtracting anticipated costs and expenses.

Interest Rates

The cost of borrowing money or the return on savings, typically expressed as a percentage.