The lower the discount rate, the ________ the present values of a future payment

Question

1. The lower the discount rate, the ________ the present values of a future payment while the higher the discount rate, the _____ the present value of a future payment.
   1. lower; higher;
   2. higher; lower;
   3. higher; higher;
   4. lower; lower.

1. If the net present value (NPV) is _____ accept the investment proposal and if the NPV is ______, reject the invest proposal:
   1. positive; negative;
   2. negative; positive;
   3. positive; positive;
   4. negative; negative.

1. The four basic mathematical formulations are:
   1. future and present value of a sum;
   2. future and present value of an annuity
   3. All of the above
   4. None of the above.

Explanation / Answer

1) 2. higher; lower;

2) 1. positive; negative;

3) 3. All of the above

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