Because "present value" refers to the value of cash flows that occur at different points in time, a series of present values of cash flows should not be summed to determine the value of a capital budgeting project.

Question

Quizplus · Accepted Answer

A series of present values of cash flows should be summed using the net present value calculation in order to determine the value of a capital budgeting project.

Because "Present Value" Refers to the Value of Cash Flows