The value of a finance company can be modeled as the present value of its future cash flows.

Question

Quizplus · Accepted Answer

The value of a finance company, like any other company, can indeed be modeled as the present value of its future cash flows. This approach is based on the principle that the value of the company is equal to the sum of all cash flows it is expected to generate in the future, discounted back to their present value to account for the time value of money.

The Value of a Finance Company Can Be Modeled as the Present