The procedure used to compute the present value of a series of cash flows is known as:
A) compounding.
B) the annuity method.
C) discounting.
D) the present-cost approach.
E) indexing.

Question

Quizplus · Accepted Answer

Discounting is the process used to determine the present value of a series of future cash flows by applying a discount rate. This method is essential in finance for assessing the value of investments, loans, and other financial instruments that involve cash flows over time.

The Procedure Used to Compute the Present Value of a Series