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You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of
You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would lower the calculated value of the investment?
The riskiness of the investment's cash flows increases. | ||
the discount rate decreases | ||
The total cash flow stays the same, but more of the cash flows are received in the later years and less in the earlier years. | ||
The discount rate increases. |
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