The process of evaluating the present value of any stream of future cash flows so that management can compare two streams of cash flows in terms of their financial value is
A)annual cash flow (ACF)analysis.
B)discretionary cash flow (DCF)analysis.
C)discounted cash flow (DCF)analysis.
D)future cash flow (FCF)analysis.

Question

Quizplus · Accepted Answer

The process of evaluating the present value of any stream of future cash flows is called discounted cash flow (DCF) analysis. It is used to compare the financial value of two streams of cash flows by considering the time value of money and discounting the future cash flows to their present value. The other options, such as annual cash flow (ACF) analysis, discretionary cash flow (DCF) analysis, and future cash flow (FCF) analysis, are not commonly used or recognized financial terms for this process.

The Process of Evaluating the Present Value of Any Stream