Before you can calculate the present value of a cash flow, you must
A)identify the expenses and revenues for each time period.
B)determine the appropriate discount rate.
C)look up interest factors in the tables.
D)use the replacement approach for the capital asset being evaluated.

Question

Quizplus · Accepted Answer

The present value of a cash flow is calculated by discounting future cash flows back to their present value. In order to do this, you need to determine the appropriate discount rate. The other options listed are not necessary for calculating present value.

Before You Can Calculate the Present Value of a Cash