To determine the present value of any future amount, you need to know
A)the future amount to be received, the interest rate, and the hurdle rate.
B)the interest rate, the cash flows to purchase the asset, and the future amount to be received.
C)when the future amount will be received, the future amount to be received, and the interest rate.
D)when the future amount will be received, the hurdle rate, and the cost of acquiring the asset.

Question

Quizplus · Accepted Answer

To determine the present value of any future amount, you need to know when the future amount will be received, the future amount to be received, and the interest rate. Knowing these three factors will allow you to calculate the present value using a formula such as the present value of a single amount. The hurdle rate and the cost of acquiring the asset are not necessary in determining the present value of a future amount.

To Determine the Present Value of Any Future Amount, You