Question

Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return.

Answer 1

Answer: The statement 2, "Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return." Is TRUE.

Explanation: "Finding the FUTURE VALUE of cash flows tells you what a cash flow will be worth in future years at a specified rate of return." is the definition for FUTURE VALUE.