What is the present value of $1,000 to be received 10 years from today? Assume that the investment pays 8.5%

What is the present value of $1,000 to be received 10 years from today? Assume that the investment pays 8.5% and it is compounded monthly (round to the nearest $1).

A) $893

B) $3,106

C) $429

D) $833

The present value of a single future sum

A) increases as the number of discount periods increases.

B) is generally larger than the future sum.

C) depends upon the number of discount periods.

D) increases as the discount rate increases.

Assuming two investments have equal lives, a high discount rate tends to favor

A) the investment with large cash flow early.

B) the investment with large cash flow late.

C) the investment with even cash flow.

D) neither investment since they have equal lives.

High discount rates favor

A) neither long-term nor short-term investments.

B) both long-term and short-term investments.

C) long-term investments.

D) short-term investments.

An increase in ________ will decrease present value.

A) the discount rate per period

B) the original amount invested

C) the number of periods

D) both A and C

What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10.

A) $5,790

B) $11,574

C) $9,210

D) $17,010