The process of determining the present value of future cash flows in order to know their value today is referred to as:
A) compound interest valuation.
B) interest on interest valuation.
C) discounted cash flow valuation.
D) future value interest factoring.
E) complex factoring.

Question

Quizplus · Accepted Answer

The process described in the question is known as discounted cash flow valuation, where future cash flows are evaluated and discounted to their present value using an appropriate discount rate. Choices A and B describe different aspects of compounding interest, while D and E are not relevant terms in finance.

The Process of Determining the Present Value of Future Cash