What term is used for the present value of future cash flows after netting out the initial cash flow?
A) Net future value
B) Gross future value
C) Gross present value
D) Net present value

Question

Quizplus · Accepted Answer

The term used for the present value of future cash flows after netting out the initial cash flow is net present value (NPV). NPV is calculated by subtracting the initial cash outflow from the present value of all future cash inflows, discounted at a specified rate. It is a commonly used method for evaluating investment opportunities and determining whether the returns on the investment exceed the required rate of return.

What Term Is Used for the Present Value of Future