In order to convert a future cash flow into a present value,you need to:

Name: In order to convert a future cash flow into a present value,you need to:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

To convert a future cash flow into a present value, we need to discount it back to the present using a discount factor. Multiplying by a discount factor achieves this. Dividing by a discount factor would convert a present value to a future cash flow. Dividing or multiplying by the current investment rate would not give us the present value.

In Order to Convert a Future Cash Flow into a Present