The process of restating future cash flows in today's dollars is known as:
A) Discounting.
B) Capitalizing.
C) Payback period.
D) Annualization.
E) Budgeting.

Question

Quizplus · Accepted Answer

The process of restating future cash flows in today's dollars is known as discounting. This is done by applying a discount rate to account for the time value of money and adjusting future cash flows back to present value.

The Process of Restating Future Cash Flows in Today's Dollars