Q484
First step in calculation of net present value is to find out
A.
present value of equity
B.
future value of equity
C.
present value cash flow
AnswerD.
future value of cash flow
Answer: Option C
Solution
Answer: Option C
Solution:
First step in calculation of net present value is to find out present value cash flow. Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.