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Assuming all else remaining constant, the present value of an investment will increase if A) the...

Assuming all else remaining constant, the present value of an investment will

increase if A) the investment is discounted at a higher interest rate. B) the investment is discounted for fewer years. C) the investment is discounted at a lower interest rate. D) both B & C.

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Answer #1

Answer - A) the investment is discounted at a higher interest rate.

PV is inversely proportional to the interest rate or discount rate and number of periods. Lower the discount rate or lower the number of periods for discounting, higher would the present value be.

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