The company's credit-adjusted risk-free rate of interest is used when computing present value applying the expected cash flow approach.

Name: The company's credit-adjusted risk-free rate of interest is used when computing present value applying the expected cash flow approach.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The credit-adjusted risk-free rate is used as the discount rate in the expected cash flow approach to account for the credit risk of the investment.

The Company's Credit-Adjusted Risk-Free Rate of Interest Is Used When