Which of the following is true of discounted cash flow methods like NPV and IRR?

Question

Quizplus · Accepted Answer

Discounted cash flow methods like NPV (Net Present Value) and IRR (Internal Rate of Return) consider the time value of money and discount future cash flows to their present value. This means that they factor in the concept of opportunity cost, which simple interest calculations do not. Additionally, these methods focus on cash flows rather than net income, and while payback period is one consideration, it is not the primary focus of these methods.

Which of the Following Is True of Discounted Cash Flow