The fundamental principle of finance is that the true or correct price of an asset equals the ________ of all cash flows that the owner of the asset expects to receive during its life.

Question

Quizplus · Accepted Answer

The principle of finance is based on the concept of present value, which states that the true or correct price of an asset is equal to the present value of all future cash flows that the owner of the asset expects to receive during its life. This principle is fundamental in finance and is used to value different types of assets, such as stocks, bonds, and real estate.

The Fundamental Principle of Finance Is That the True or Correct