The present value of a cash flow decreases as it moves further into the future.

Name: The present value of a cash flow decreases as it moves further into the future.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is because of the time value of money, which states that the value of money decreases over time due to factors such as inflation and the opportunity cost of not having the money available for other uses. Therefore, a cash flow that is received in the future is worth less in present-day dollars.

The Present Value of a Cash Flow Decreases as It