An asset is expected to pay $25 in one year and $75 in two years. Which of the following will cause the present value of the asset to decline?
a) instead of $75, investors now expect it to be $65
b) investors believe the cash flows to be more risky than they originally thought
c) the $25 is now expected to be paid in two years instead of one
d) none of the above
Answer:
a) instead of $75, investors now expect it to be $65
b) investors believe the cash flows to be more risky than they originally thought
c) the $25 is now expected to be paid in two years instead of one
Business
You might also like to view...
What are the features that distinguish universal life from traditional forms of life insurance?
What will be an ideal response?
Business
Which of the following inventory costing methods reports most closely the current cost of inventory on the balance sheet?
a. FIFO b. Specific identification c. Weighted average d. LIFO
Business