Ainding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you what a cash fow will be worth in future years at a specified rate of return. Finding the present value of cash flows telis you haw much you need to invest today so that it grows to a given future amount at a specified rate of return. Which of the following investments that pay will $15,500 in 8 years will have a lower price today? The security that earns an interest rate of 8.25%. The secunty that eams an interest rate of 5.50%. Eric wants to invest in government secuntie J that promise to poy $1,000 at maturity. The oppertunity cost (interest rate) of holding the security is 6. 80\%. Assuming that both investments have equal risk and Eric's imvestment time horizon is flexible, which of the foliowing investment options will exhibie the lower price? An investment that matures in five years An investment that matures in six years Which of the following is true about present value calculations? Other things remaining equal, the present value of a future cash flow increases if the discount rate increases. Other things remaining equal, the present value of a future cash flow decreases if the discount rate increases