Asked by Regan Mc Mullan on Jul 11, 2024
Verified
Discounted cash flow techniques automatically take into account recovery of the initial investment.
Discounted Cash Flow
An analysis method used to estimate the value of an investment based on its expected future cash flows, adjusted for time value of money.
Initial Investment
The amount of money used to start a project, venture, or purchase an investment, before any returns or profits are considered.
- Gain insight into the idea and mathematical approach to calculating the internal rate of return.
- Recognize the foundational beliefs supporting the net present value and internal rate of return approaches.
Verified Answer
AG
Anushka GuptaJul 13, 2024
Final Answer :
True
Explanation :
Discounted cash flow techniques involve calculating the present value of future cash inflows, which includes the recovery of the initial investment. Therefore, it is automatically factored into the calculation.
Learning Objectives
- Gain insight into the idea and mathematical approach to calculating the internal rate of return.
- Recognize the foundational beliefs supporting the net present value and internal rate of return approaches.