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If the prevailing interest rate is positive, the present value of a project's future return will be greater than the future return itself.
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A firm is evaluating a project that will generate a guaranteed return of $50,000 one year from now. If the prevailing market interest rate unexpectedly falls, what is the immediate effect on the present value of the project's future return?
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If the prevailing interest rate is positive, the present value of a project's future return will be greater than the future return itself.
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