Restating future cash flows in terms of present values and then determining the payback period using these present values is known as:
A)Break-even time (BET)
B)Internal rate of return method.
C)Accounting rate of return method.
D)Net present value method.
E)Present value method.

Question

Quizplus · Accepted Answer

EBreak-even time (BET) and the Present value method both involve restating future cash flows in terms of present values to analyze investments or projects. BET specifically looks at the time it takes for an investment to pay back its initial cost, while the Present value method is a broader term that can include calculating the present value of future cash flows for various purposes, including determining payback periods.

Restating Future Cash Flows in Terms of Present Values and Then