An estimate of an asset's value to the company,calculated by discounting the future cash flows from the investment at the project's required rate of return and then subtracting the initial amount of the investment,is known as:
A)Annual net cash flows.
B)Rate of return on investment.
C)Net present value.
D)Payback period.
E)Unamortized carrying value.

Question

Quizplus · Accepted Answer

The described calculation is the formula for calculating net present value (NPV), which provides an estimate of the value of an investment by comparing the present value of expected future cash flows to the initial cost of the investment. NPV is a commonly-used financial metric for evaluating the viability of a project or investment.

An Estimate of an Asset's Value to the Company,calculated by Discounting