The reason that finding the present value of a future sum of money requires us to discount it, is that:

Related MCQs

• The rate of discount which equilibrates the cost of capital good s and the expected future returns from the capital good is known as
• If interest rates rise, the present value of any future earnings is bound to:
• Each of the following techniques use discounted cash flows to incorporate the time value of money into their analysis except
• If the net present value is greater than zero, then the project is
• If the net present value (NPV) is more than one, then the project may be
• If rate of interest is 10% the PV (present value) of Rs. 100 received in 1 years time is
• Under Net present value criterion, a project is approved if
• What is the net present value?
• The net present value
• When using the net present value and the internal rate of return to evaluate capital projects: