What term is used for the present value of the future cash flows after netting out the initial cash flow.
A) Real value
B) Net discounted value
C) Discounted present value
D) Net present value

Question

Quizplus · Accepted Answer

Net present value (NPV) is the term used for the present value of the future cash flows after netting out the initial cash flow. It is calculated by subtracting the initial investment from the present value of the future cash flows, discounted at a chosen rate of return. NPV is a common financial metric used in capital budgeting to determine the profitability of an investment or project.

What Term Is Used for the Present Value of the Future