The difference between the present discount value of a revenue stream and the present discount value of a cost stream is called the
A) Interest rate
B) Net present value
C) Net cash flow
D) Profit

Question

Quizplus · Accepted Answer

The difference between the present discount value of a revenue stream and the present discount value of a cost stream is known as the net present value (NPV). NPV is commonly used to determine the profitability of an investment, project, or business venture by comparing the current value of cash inflows to the current value of cash outflows. A positive NPV indicates that a project is profitable, while a negative NPV implies that a project is unprofitable. Therefore, the best choice for this question is B - Net present value.

The Difference Between the Present Discount Value of a Revenue