_____ analysis is based on the concept that the longer you have to wait to receive money,the less valuable it is right now.

Question

Quizplus · Accepted Answer

Discounted cash flow analysis takes into account the concept of time value of money, which means that money you receive in the future is worth less than money you receive right now. This is because you can invest the money you have right now and earn a return on it. Therefore, the analysis discounts the future cash flows to their present value to provide a more accurate estimate of their worth in today's dollars. Replacement value cash flow, free cash flow, and book value cash flow don't take into account the time value of money in the same way as discounted cash flow analysis.

_____ Analysis Is Based on the Concept That the Longer