Question
Jan is working some practice problems for the Introductory Corporate Finance class at Monenestoga College. One of the practice questions is as follows: Given a
Jan is working some practice problems for the Introductory Corporate Finance class at Monenestoga College. One of the practice questions is as follows: Given a constant future value and discount rate, an increase in the number of time periods will _____ the present value. Which of the following correctly completes the sentence?
Group of answer choices
Not affect
Either increase or not affect
Either not affect or decrease
Increase
Decrease
2. You recently completed your business degree and are currently negotiating with a prospective employer. They offer you a signing bonus of $30,000 today or a lump sum payment of $50,000 three years from now. If you can earn 7% on your invested funds, which of the following is true?
Take the lump sum because it has the higher present value.
Take the signing bonus because it has the higher future value.
Take the lump sum because it has the lower future value.
Take the signing bonus because it has the lower present value.
Based on these numbers, you are indifferent between the two.
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