State the capital budgeting measure that requires the discounting of an investment’s future cash flows .

Question

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Answer 1

Question

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

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Answer 2

Question

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

Answer 6

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.

Conclusion

Hence, the correct option is option b.

Answer 7

Chapter 26, Problem 1STQ

To determine

State the capital budgeting measure that requires the discounting of an investment’s future cash flows.

Answer 8

Expert Solution & Answer

Answer to Problem 1STQ

b. Net present value.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Discounted cash flow:

Discounted cash flow is a process which is used to evaluate the value of an investment based on its future cash flows. The Discounted cash flow analysis finds that the present value of the expected future cash flows uses a discount rate. Hence to calculate the potential investment, the present value estimate is used.

From the above explanation it is clear that option a, c and d are incorrect only option b is correct.