Explain in words why the present value of $100 to be received in 10 years would decline

Question:

Explain in words why the present value of $100 to be received in 10 years would decline as the interest rate rises.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics

ISBN: 978-1259663048

10th edition

Authors: David C. Colander

See More Books

Question Posted: Dec 05, 2018 06:30 AM

See More Questions

A consultant commented that too often the numbers look good but feel bad. This comment often stems from estimation error common to capital budgeting proposals that relate to future cash flows. Three...
What is the present value of $100 to be received in 3 years if the appropriate interest rate is 10%?
Whats the present value of $100 to be received in 3 years if the interest rate is 10%, annual compounding?
You have been provided the following data about the securities of three firms, the market portfolio, and the riskfree asset: a. Fill in the missing values in the table. b. Is the stock of Firm A...
Recent studies show that conservative Republican political ideology is associated with greater overall life happiness than liberal Democratic ideology. One potential explanation for this is that...
You are considering opening a new plant. The plant will cost $100 million upfront and will take one year to build. After that, it is expected to produce profits of $30 million at the end of every...
What measurement focuses (identifying which resources are being measured) and bases of accounting (identifying when the effects of transactions or events should be recognized) are used by...
Using the information presented in the following table, identify the processing sequence that would result using (1) FCFS, (2) SPT, (3) EDD, and (4) CR. For each method, determine (1) average job...
VYZ Ltd, a company traded on the GSE made the following returns over ten year period REL ga Ver 2000 2001 2002 2003 2003 2005 2006 2007 200N 2000 0.12 05 023 0.00 0.11 0.42 DIS Calculate the risk -...
The following amounts (in thousands) were taken from the December 31 statements of financial position of Maple Leaf Foods Inc.: __________________2015__________2014 Total...
A 6 percent bond will pay you $1,060 one year from now. The interest rate in the economy is 10 percent. How much is that bond worth now?
State the immediate effect of each of the following actions on M 1 and M 2 : a. Barry writes his plumber a check for $200. The plumber takes the check to the bank, keeps $50 in cash, and deposits the...
A monopolists inverse demand function is P = 100 Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 4Q1, and the marginal cost of producing...
On July 1, 2021, P Company borrowed P160,000 to purchase 80 percent of the outstanding common stock of S Company. This loan, carrying a 10 percent annual rate, is payable in 8 annual installments...
Case Analysis Strategic leaders, being at the highest level of an organization, are responsible for charting its path to success. They visualize an ideal picture of their enterprise in a futuristic...
3 Refrigerant-134a enters a adiabatic compressor at 100 kPa and -24C with a flow rate of 1.300 m/min and leaves at 800 kPa and 60C. Determine the mass flow rate of R-134a and the power input to the...
The following trial balance of Bramble Traveler Corporation does not balance. Bramble Traveler Corporation Trial Balance April 30, 2025 Debit Credit Cash $6,221 Accounts Receivable 5,350 Supplies...
From this analysis, we can see than the actual number of unit produced was actually less than the forecasted, yet the actual revenue gain from were greater than the forecasted one. This situation...
An online retailer is offering a new line of running shoes. The retailer plans to send out an e-mail with a discount offer to some of its existing customers and wants to know if it can use data...
Is that Yelp review real or fake? The article A Framework for Fake Review Detection in Online Consumer Electronics Retailers (Information Processing and Management 2019: 12341244) tested five...
Suppose a single-price monopolys demand curve is given by P = 20 4Q, where P is price and Q is quantity demanded. Marginal revenue is MR = 20 8Q. Marginal cost is MC = Q2. How much should this firm...
Draw the relevant curves to show a monopolistic competitor suffering a loss in the short run. What will this firm do in the long run if the situation does not improve? (Assume its ATC and MC curves...
Draw the relevant curves to show a monopolistic competitor earning an economic profit in the short run. Graphically show what this firm can expect to happen to this economic profit in the long run....
why would an auditor want to complete dual-purpose tests? what procedure can be put into place to help prevent fraud? List 4 procedures.
Based on the following information, calculate sustainable growth rate for Groot, Inc.: Profit margin= 7.1% Total asset turnover = 1.90 Total debt ratio = .45 Payout ratio = 20% What is the ROA here?
Consider the following: a call option on a stock has strike price $100, premium of $5 and the current price of the underlying stock is $100. If you buy the call option today, what is your holding...

Explain in words why the present value of $100 to be received in 10 years would decline

Question:

Step by Step Answer:

As interest rates rise ...View the full answer

Macroeconomics

Students also viewed these Business questions