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

Question

Quizplus · Accepted Answer

The value of future cash flows discounted at the appropriate discount rate gives the present value. The present value is the current worth of a future sum of money or stream of cash flows given a specific rate of return. It is important in finance for determining the fair value of a proposed investment or evaluating the potential returns of any investment.

The Value Today of Future Cash ﬂOws Discounted at the Appropriate