Reference no: EM132651006
Problem 1: A dollar paid (or received) in the future is
Option 1: not comparable to a dollar paid (or received) today.
Option 2: worth more than a dollar paid (or received) today.
Option 3: not worth as much as a dollar paid (or received) today.
Option 4: worth as much as a dollar paid (or received) today.
Problem 2: How are present values affected by changes in interest rates?
Option 1: Present values are not affected by changes in interest rates.
Option 2: The lower the interest rate, the larger the present value will be.
Option 3: One would need to know the future value in order to determine the impact.
Option 4: The higher the interest rate, the larger the present value will be.