Cash flows forecast to continue forever are compressed into finite terminal values using future value formulas.

Name: Cash flows forecast to continue forever are compressed into finite terminal values using future value formulas.
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Quizplus · Accepted Answer

Cash flows forecast to continue forever are typically compressed into a single value using present value formulas, not future value formulas, to calculate their net present value as of today. This is often done through a process known as capitalizing the perpetual cash flows.

Cash Flows Forecast to Continue Forever Are Compressed into Finite