Firms frequently find themselves in situations where they must choose between pursuing short-term projects that will increase profits immediately (for example, an advertising campaign) and long-term projects that will not increase profits until several years have passed (for example, research designed to develop a new technology.)

(i) Discuss the various techniques used by firms to choose between these projects

(ii) Based on your analysis of the effects of time and the interest rate on present value, how do you think changes in the interest rate will influence a firm's choice between a short term and a long-term project?