Present value calculations assume that an investor always prefers an investment's present value to its future cash flows.

Question

Quizplus · Accepted Answer

Present value calculations consider the time value of money and allow investors to compare the value of cash flows at different points in time. However, investors may not always prefer the present value of an investment over its future cash flows, as they may have different investment goals and risk preferences.

Present Value Calculations Assume That an Investor Always Prefers an Investment's