QUESTION 14 10 points Save Answer \"You are scheduled to receive $10,000 in one

Question

QUESTION 14 10 points Save Answer "You are scheduled to receive $10,000 in one year. What will be the effect of an increase in the interest rate on the present value of this cash flow?" O A) It will cause the present value to fall. O B) It will cause the present value to rise. ° C) It will have no effect on the present value. D) The effect cannot be determined with the information provided QUESTION 15 10 points Save Answer If the interest rate is 7.5%, the 1-year discount factor is equal to numerical terms. For example, if the answer is 596, enter 0.05 as an answer." Note: Express your answers in strictly QUESTION 16 10 points Save Answer If the interest rate is 7.5%, the 10-year discount factor is equal to Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, enter 0.05 as an answer."

Explanation / Answer

14. Option a, as interest rate is inversly proportional to present value

15.discount factor =1/(1+r)^n

=1/(1.075)=0.93023

16.discount factor =1/(1.075)^10

=0.48519

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