The discounted cash flow technique measures the present value of future benefits from an investment as compared to the investment outlay.

Question

Quizplus · Accepted Answer

The statement is true. The discounted cash flow technique is a widely used method to evaluate the potential profitability of an investment by comparing the present value of estimated future cash flows to the initial investment cost. This comparison helps investors determine whether a potential investment will provide a satisfactory return considering the risks and opportunity cost of alternative investments.

The Discounted Cash Flow Technique Measures the Present Value of Future