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Author Question: If interest rates are positive, then discounting increases the future value of an investment while ... (Read 45 times)

Charlie

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on: Jul 10, 2018
If interest rates are positive, then discounting increases the future value of an investment while compounding reduces the present value of an investment.
 
  Indicate whether the statement is true or false.

Question 2

In valuation of common stock, the price/earnings multiple approach is considered superior to the use of book or liquidation values since it considers expected earnings.
 
  Indicate whether the statement is true or false


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nyrave

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

Answer: FALSE
Explanation: Discounting DECREASES the PRESENT value of an investment while compounding INCREASES the FUTURE value of an investment.

Answer to Question 2

TRUE


Charlie

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Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

xiaomengxian

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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