A company's net present value:
A) is the current value of the company's expected future cash flows.
B) is a measure of the book value of that company.
C) tells you the "correct" price of shares in the company.
D) adds up the value of all the assets a company currently owns.

Question

Quizplus · Accepted Answer

Net present value reflects the value of expected future cash flows, discounted using a chosen discount rate to reflect the time value of money. It does not directly measure the book value or market value of the company's shares or assets.

A Company's Net Present Value