Asked by Paula marques on Jun 09, 2024
Verified
The value today of future cash flows discounted at the appropriate discount rate is called the _____ value.
A) Principal
B) Future
C) Present
D) Simple
E) Compound
Present Value
The monetary value as of now of future payments or a lump sum, calculated with a certain interest rate.
Discount Rate
Used in discounted cash flow analysis, this rate aids in calculating the present worth of cash flows anticipated in the future.
Cash Flows
The aggregate of all monetary exchanges into and out of a business endeavor, directly affecting its operational cash levels.
- Comprehend the principles and computations associated with present and future values.
Verified Answer
VS
Victoria SalgadoJun 11, 2024
Final Answer :
C
Explanation :
The value today of future cash flows discounted at the appropriate discount rate is called the Present value. This concept is a fundamental principle in finance, reflecting the time value of money.
Learning Objectives
- Comprehend the principles and computations associated with present and future values.