Assuming an after-tax rate of return of 10 percent, John should prefer to pay an expense of $85 today instead of an expense of $100 in one year.
True or False
Present value of $100=$100*Present value of discounting factor(rate%,time period)
=$100/1.1
=90.91(Approx).
Hence $85 must be paid today having lower present value.True.
Assuming an after-tax rate of return of 10 percent, John should prefer to pay an expense...
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