The present value factor increases as the number of period decreases.

Name: The present value factor increases as the number of period decreases.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The present value factor, which is used to discount future cash flows to their present value, increases as the number of periods decreases because there is less time for the discount rate to apply, thus reducing the amount of discounting.

The Present Value Factor Increases as the Number of Period