The present value is simply the current value of a future cash flow that has been discounted at an appropriate discount rate.

Question

Quizplus · Accepted Answer

The statement is true. Present value is the current value of a future cash flow that has been discounted at an appropriate discount rate. This is done to account for the time value of money and to adjust for the fact that a dollar today is worth more than a dollar received in the future.

The Present Value Is Simply the Current Value of a Future