The interest rate used to compute the present value of future cash flows refers to:
A) discount rate.
B) investment rate.
C) transfer rate.
D) future cash flow rate.
E) valuation rate.

Question

Quizplus · Accepted Answer

The interest rate used to compute the present value of future cash flows is called the discount rate. This rate is used to discount future cash flows to their present value, which takes into account the time value of money. The discount rate is often used in financial analysis and is an important factor in determining the value of investments and business opportunities.

The Interest Rate Used to Compute the Present Value of Future