To evaluate or compare investment proposals,we must adjust the value of all cash flows to a common date.

Question

Quizplus · Accepted Answer

This is true because comparing investment proposals that require different initial cash flows, timing, and duration would require the use of a common evaluation metric. The process of adjusting all cash flows to a common date is known as discounting, and it is an essential component of discounted cash flow analysis, which is used to evaluate investment opportunities.

To Evaluate or Compare Investment Proposals,we Must Adjust the Value