To evaluate long-term investments using the net present value approach,future cash flows of these investments must be stated in future value equivalents.

Question

Quizplus · Accepted Answer

To evaluate long-term investments using the net present value approach, future cash flows must be converted into present value equivalents, not future value equivalents. Future value equivalents represent the value of an investment at a future point in time, whereas net present value represents the value of an investment in today's dollars.

To Evaluate Long-Term Investments Using the Net Present Value Approach,future