The 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 adding the present values of all project cash flows, including the initial investment as a negative amount. This gives the project's net value in today's money.
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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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