To compute the future value of a cash flow, you must
A)discount it.
B)arbitrage it.
C)compound it.
D)double it.

Question

Quizplus · Accepted Answer

To compute the future value of a cash flow, you must compound it. This involves calculating the value of the initial cash flow plus any interest or returns earned over a specified period, which results in a larger total value in the future. Discounting involves the opposite process, where future values are converted to their present value by adjusting for the time value of money. Arbitrage involves taking advantage of price differences in different markets, and doubling a cash flow is not a valid financial calculation.

To Compute the Future Value of a Cash Flow, You