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Please help this is worth 25% of my final grade and is timed. Thank you!! Finding a present value is the reverse of finding a
Please help this is worth 25% of my final grade and is timed. Thank you!!
Finding 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? O Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. O Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Which of the following investments that pay will $5,000 in 12 years will have a higher price today? The security that earns an interest rate of 8.25%. The security that earns an interest rate of 5.50%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost interest rate) of holding the security is 13.80%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options will exhibit the lower price? O An investment that matures in eleven years O An investment that matures in ten years Which of the following is true about present value calculations? O Other things remaining equal, the present value of a future cash flow decreases if the investment time period increases. O Other things remaining equal, the present value of a future cash flow increases if the investment time period increasesStep by Step Solution
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