Present Value is defined as:
A) Future cash flows discounted to the present at an appropriate discount rate
B) Inverse of future cash flows
C) Present cash flow compounded into the future
D) None of the above

Question

Quizplus · Accepted Answer

Present Value is the value of a future cash flow as of today's date, discounted to reflect the time value of money and the risk associated with receiving that cash flow. It is calculated using an appropriate discount rate. Option B and C are not correct definitions of Present Value.

Present Value Is Defined As