--%>

Present value influenced by change in the discount rate

How is present value influenced by a change in the discount rate?

Present value is inversely associated to the discount rate. In other term, present value moves in the opposite direction of the discount rate. If the discount rate rises up, present value decreases. If the discount rate reduces, present value increases.

   Related Questions in Finance Basics

  • Q : Graphically combined transactions and

    Normal 0 false false

  • Q : Explain Administratively Established

    Administratively Established Positions: The positions authorized by the Department of Finance throughout a fiscal year that were not comprised in the Budget and are essential for workload or administrative reasons. These positions fin

  • Q : What is Expenditure Authority

    Expenditure Authority: The authorization to make expenditure (generally by a budget act appropriation, provisional language or some other legislation).

  • Q : Two Questions Question 1 An all equity

    Question 1 An all equity firm has a required return on its equity of 15%, has 10 million shares outstanding, and pays no taxes. The shares are currently trading at $6.00 each. The firm is planning to borrow $9 million at 5% interest rate and use the borrowed funds to buyback a portion of its equi

  • Q : Factors affecting option of maximum

    Describe the factors affecting the alternative of a maximum cash balance amount. The maximum cash balance amount is finding out by obtainable investment opportunities, the expected return on investments, and the transaction cost of making invest

  • Q : Influence of mergers on fees assessed

    What influence have mergers had on fees assessed for retail bank services? The effect is not clear. Market conditions and the level of competition often determine the cost for retail bank services.

  • Q : What is Continuing Appropriation

    Continuing Appropriation: This is an appropriation for the set amount which is obtainable for more than 1-year.

  • Q : Down sloping and upsloping Normal 0

    Normal 0 false false

  • Q : Legal factors to restrict a corporation

    Are there any legal factors which could restrict a corporation in its attempt to pay cash dividends to common stockholders? Describe. A firm may be legally limited as to the dividends it can pay through existing bond indentures or loan agreemen

  • Q : Relationship which MPC bear to the size

    Normal 0 false false