[Equations] When determining the impact on present value (PV) of activities in the future which of the following factor(s) will IMPROVE the present value if they are INCREASED?

A. Only the discount rate (r)

B. Future value (FV)

C. Both the discount rate and the distance into the future in which the event occurs (t)

D. Only the distance into the future in which the event occurs (t)

Equation Notes: Equation A: FV 1. Terms PV = a. PV = present value (1+r) b. FV = future value C. 1 = One (part of the mathematical construct that defines this formula) PV = > FV. d. r = Discount rate per period of time Equation B: (1+r) e. t = Number of time periods in the future when FV will be received PV = FV . FV . 2. Equations B & C are alternate ways to +...+ FV express the same idea, the present value Equation C: (1+r) (1+r) (1+r) of a string of payments Equations Figure D Notes: Improved 1. This figure was adapted from Figure 13.1 in Olsen's First Edition but was Health care Health used in lecture (see Slides 3 & 4). 2. The dashed arrows from the "Production Gains" box to both the Health "Health care" and "Other resources" boxes were added. Production Other resources Production gains Figure A: Healthcare Costs and Benefits