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Author Question: Even with an interest rate of 0.0, the future value of a 5-year 800 annual annuity will be greater ... (Read 28 times)

sheilaspns

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on: Jul 10, 2018
Even with an interest rate of 0.0, the future value of a 5-year 800 annual annuity will be greater than the present value of the same annuity.
 
  Indicate whether the statement is true or false.

Question 2

The risk-adjusted discount rate for a replacement decision will be less than the rate used by the
  same firm when considering a new product line.
 
  Indicate whether the statement is true or false
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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eliasc0401

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: The present value and future value will be the same with an interest rate of 0.0.

Answer to Question 2

TRUE


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