As the discount rate increases, the present value of a positive cash flow to be received at a particular time in the future: gets closer to zero gets larger without limit stays unchanged gets smaller without limit

As the discount rate increases, the present value of a positive cash flow to be received at a particular time in the future: gets closer to zero gets larger without limit stays unchanged gets smaller without limit

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section9.5: Multistage Decision Problems

Problem 19P

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Concept explainers

Forecasting in Business

Forecasting is the process of predicting the future based on the past and the present data and circumstances. In other words, forecasting is the act of making a detailed analysis of future events based on the decisions made in the past as well as the present. Forecasting plays a very important role in operational management as it helps in planning and decision-making. It is not only important for the success of a business but also contributes to individual growth and success. Many business organizations or companies have failed due to the shortcomings of their forecasting.

Question

_{Multiple Choice}

As the discount rate increases, the present value of a positive cash flow to be received at a particular time in the future:

gets closer to zero
gets larger without limit
stays unchanged
gets smaller without limit

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