Question: When valuing future cash flows why might it be appropriate to discount cash flows received farther into the future at a higher rate? The rate
When valuing future cash flows why might it be appropriate to discount cash flows received farther into the future at a higher rate?
The rate of inflation tends to increase over time.
It is typically less certain that cash flows promised farther into the future will be received.
Dollars received farther into the future are worth less than those received earlier.
Cash flows should always be discounted at the same rate if they are to be provided from the same source
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