The relationship between the discount rate and the present value is
A)inverse.
B)proportional.
C)constant.
D)sporadic.

Question

Quizplus · Accepted Answer

The discount rate and present value are inversely related. As the discount rate increases, the present value decreases and vice versa. This is because as the discount rate increases, the value of future cash flows is discounted by a higher discount factor, leading to a lower present value.

The Relationship Between the Discount Rate and the Present Value