Q492
In estimating value of cash flows, compounded future value is classified as its
A.
terminal value
AnswerB.
existed value
C.
quit value
D.
relative value
Answer: Option A
Solution
Answer: Option A
Solution:
In estimating value of cash flows, compounded future value is classified as its terminal value. Terminal value (TV), or horizon value, determines the value of a business or project beyond the forecast period when future cash flows can be estimated.