Once the cash flows and discount rate have been determined,calculate the present value of each cash flow by multiplying each one by the appropriate present value factor.

Question

Quizplus · Accepted Answer

This statement is correct. To calculate the present value of each cash flow, we need to multiply each cash flow by the appropriate present value factor, which is the factor that discounts the cash flow back to its present value based on the discount rate and time period. This process allows us to determine the net present value (NPV) of the investment or project, which is a measure of its current value in today's dollars.

Once the Cash Flows and Discount Rate Have Been Determined,calculate