1. All else constant, the present value of a stream of equal cash flows occurring at equal intervals of time will increase when the discount rate is decreased and the number of time periods is decreased (assume other information is the same).
True
False
2. A firm is considering a project that will produce cash inflows of $36,000 in year one, $54,800 in year two, and $72,900 in year three. What is the present value of these cash inflows if the company assigns the project a discount rate of 14%?
$106,713.06
$122,951.19
$131,333.33
$167,098.12