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We refer to R as the interest rate or the discount rate. What happens to the present value if we increase the discount rate? Assume

We refer to R as the interest rate or the discount rate. What happens to the present value if we increase the discount rate? Assume everything else stays the same. Increase R, and what happens the the value of the PV?

Present value decreases.

Present value increases.

Present value does not change.

The effect on the PV cannot be determined from the information given.

It depends.

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