Asked by Sunshine Vicente on Jun 24, 2024
Verified
The present value of a stream of cash flows is what that stream is worth in today's dollars.
Present Value
The current value of a future sum of money or stream of cash flows given a specified rate of return.
Cash Flows
The movement of money into and out of a business, project, or financial product, reflecting its operational and financial health.
- Appreciate the critical role of discounted cash flow analysis in the comparison of financial values associated with various cash flows.
Verified Answer
MH
Maggie HartleyJun 29, 2024
Final Answer :
True
Explanation :
The present value of a stream of cash flows takes into account the time value of money and discounts future cash flows to their equivalent value in today's dollars.
Learning Objectives
- Appreciate the critical role of discounted cash flow analysis in the comparison of financial values associated with various cash flows.