The following table shows the present values of a $1 payment in the future, discounted at different rates. For example, $1 paid in 10 years' time is worth $0.82 today when discounted at 2% annually....



A) A discount rate of 0% means that payments are worth the same today and at all points in future.



B) Tripling the time to payment decreases present value to a third of the original value (that is, 1/3 of the original value).



C) The differences between the effects of discount rates become larger as the time to payment gets shorter.



D) Tripling the discount rate decreases present value to a third of the original value (that is, 1/3 of the original value).


The following table shows the present values of a $1 payment in the future,<br>discounted at different rates. For example, $1 paid in 10 years' time is worth<br>$0.82 today when discounted at 2% annually.<br>Discount rate (%)<br>Years in the future<br>1<br>10<br>50<br>100<br>0.0%<br>$1.00<br>$1.00<br>$1.00<br>$1.00<br>$1.00<br>1.0%<br>$1.00<br>$0.99<br>$0.90<br>$0.61<br>$0.37<br>2.0%<br>$1.00<br>$0.98<br>$0.82<br>$0.37<br>$0.14<br>5.0%<br>$1.00<br>$0.95<br>$0.61<br>$0.09<br>$0.01<br>Based on this information, which of the following statements is correct?<br>

Extracted text: The following table shows the present values of a $1 payment in the future, discounted at different rates. For example, $1 paid in 10 years' time is worth $0.82 today when discounted at 2% annually. Discount rate (%) Years in the future 1 10 50 100 0.0% $1.00 $1.00 $1.00 $1.00 $1.00 1.0% $1.00 $0.99 $0.90 $0.61 $0.37 2.0% $1.00 $0.98 $0.82 $0.37 $0.14 5.0% $1.00 $0.95 $0.61 $0.09 $0.01 Based on this information, which of the following statements is correct?

Jun 03, 2022
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