Question
assume your first compute the present value of $1 million using discount rate 1, and then for comparison purposes calculate it again using a different
assume your first compute the present value of $1 million using discount rate 1, and then for comparison purposes calculate it again using a different rate. Which of the following statement would not be valid regarding these calculations.
A. if either rate is negative, present value calculations using such discount rate would yield a value greater than $1 million
B. if discount rate 1 us greater than discount rate 2, the present value calculated using 1, will be lower than the present value calculated using 2
C. if the discount rate 1, is greater than zero but lower than 1%, the present value calculated using this discount rate will be greater than $1.
D. if the discount rate 1 is equal to zero, the present value calculated using this discount rate will be equal to $1million
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