Consolidation of cash flows occurring at different times is made possible by using the:
A)time value principles that determine the present value of cash flow to be received in the future.
B)absolute values of the cash flow no matter when it is to be received.
C)principle that future cash flow is unreliable and can be disregarded.
D)the average of the cash flows to be received.

Question

Quizplus · Accepted Answer

Time value principles, specifically the concept of present value, allow for the consolidation of cash flows occurring at different times. This is because present value takes into account both the timing and amount of future cash flows and calculates their equivalent value in today's dollars. This allows for comparison and consolidation of cash flows occurring at different times. The other choices (B, C, D) do not accurately address the issue of consolidating cash flows occurring at different times.

Consolidation of Cash Flows Occurring at Different Times Is Made