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The interest rate used to bring a future cash flow back to today is called the:
ADiscount rate
BDeposit rate
CDelivery rate
DDuty rate
Answer & Solution
Correct answer: A. Discount rate
1. It works backwards through time.
2. It reduces the future amount.
3. It is the discount rate.
_Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._
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