If payments of $1000 are to be received every year for 20 years and the interest rate is positive, the present value of this stream will
A. equal $1000 × 20 ($20,000).
B. increase as the interest rate increases.
C. be less than $1000 × 20 ($20,000).
D. exceed $1000 × 20 ($20,000).
Answer: C
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What will happen when there is a rightward shift in the demand curve?
A) The product price will instantaneously adjust downward. B) Product prices do not change in this situation. C) Producers will decrease the product price. D) A new, higher price is not instantaneously achieved, but the price will rise over time.
Under the gold standard, a nation’s domestic economic policy
a. was subordinate to balance-of-payments adjustments. b. controlled balance-of-payments adjustments. c. was unrelated to balance-of-payments adjustments. d. was controlled by the World Bank.
An advantage of a consumption tax over the present tax system is that a consumption tax
a. raises more revenues. b. would save the government millions in administrative costs. c. places more of the tax burden on the wealthy. d. does not discourage saving.
Bank A has checkable deposits of $10 million and total reserves of $1 million. The required reserve ratio is 9 percent. The bank has required reserves of
A) $910,000. B) $90,000. C) $900,000. D) $1,000,000. E) There is not enough information provided to answer this question.