Sum of discounted cash flows is best defined as____________?
Correct answer: C. Project net present value
- A. Technical equity
- B. Defined future value
- C. Project net present value
- D. Equity net present value
Explanation
Net present value is obtained by summing all cash flows after discounting them to present value, including the initial investment outflow. A positive or negative result shows the value created or lost at the required return.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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