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mart [117]
3 years ago
9

The present value of a cash flow will _________ be less than the future dollar amount of the cash flow

Business
1 answer:
nata0808 [166]3 years ago
7 0

The present value of a cash flow will always be <u>less</u> than the future dollar amount of the cash flow.

<h3>What is the present value?</h3>

The present value is the value of future cash flows discounted by the discount rate to today's value.

Discounting converts a future value to an equivalent value received today. Discounting measures the relative value of a series of future cash flows to a present value.

For example, if $500 is to be received in ten years, with a discount rate of 5%, its present value will be $307 ($500 x 0.614).

Thus, the present value of a cash flow will always be <u>less</u> than the future dollar amount of the cash flow.

Learn more about the present and future values at brainly.com/question/15904086

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