Because "present value" refers to the value of cash flows that occur at different points in time,a series of present values should not be summed to determine the value of a capital budgeting project.

Question

Quizplus · Accepted Answer

The present value of a series of cash flows can be summed to determine the value of a capital budgeting project, as this process discounts future cash flows back to their value in present terms, allowing for a comprehensive evaluation of the project's worth.

Because "Present Value" Refers to the Value of Cash Flows