Question: Why is a cash flow in the future worth less than the same amount today?

Why is a cash flow in the future worth less than the same amount today?

Step by Step Solution

★★★★★

3.38 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

To conclude we can say that the reason money ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1198-B-C-F-O(1100).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

Q:

Why do net income and cash flow in the numerical examples in this chapter both grow at the same rate (g) in the terminal value period? Why is this important?

Q:

Why is so much emphasis put on cash flow in the budgeting process?

Q:

What is a cash flow statement, and why is it important?

Q:

7. Why is a cash flow in the future worth less than the same amount today?

Q:

7. Why is a cash flow in the future worth less than the same amount today?

Q:

Why is a cash flow in the future worth less than the same amount today?

Q:

these are 4 questions in cooperate finance seminar . 1.) Suppose that you will receive $10,000 five years from now. What is it worth today? What is it worth 3 years from today? What is it worth 10...

Q:

What are the fundamental elements of this text: Discussion #2 - Devarsh Parekh 1 A) What is the importance of NPV to organizations? NPV is crucial for organizations for several reasons. First of all,...

Q:

Comment this text A) What is the importance of NPV to organizations? NPV is crucial for organizations for several reasons. First of all, what is NPV (Net present value). NPV is a method that...

Q:

Give a brief summarize of this text: A) What is the importance of NPV to organizations? NPV is crucial for organizations for several reasons. First of all, what is NPV (Net present value). NPV is a...

Q:

1. USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Asset (A) E(RA) = 25% // (A) = 18% // WA = 0.75 // COVA,B = 0.0009 Asset (B) E(RB) = 15% // (B) = 11% // WB = 0.25 a. What is the expected...

Q:

Discuss why a company's stockholders might be interested in its environmental and social performance. Next, determine the critical pieces of information companies are providing and why this...

Q:

An advertiser of a certain brand of aspirin (lets call it Brand B) claims that it is the preferred painkiller for headaches, on the basis of the results of a survey of headache sufferers. But further...

Q:

Describe the process of developing user requirements and system specifi cations.

Q:

Under standard accounting rules, it is possible for a companys liabilities to exceed its assets. When this occurs, the owners equity is negative. Can this happen with market values? Why or why not?

Q:

Under standard accounting rules, it is possible for a companys liabilities to exceed its assets. When this occurs, the owners equity is negative. Can this happen with market values? Why or why not?

Q:

Under standard accounting rules, it is possible for a companys liabilities to exceed its assets. When this occurs, the owners equity is negative. Can this happen with market values? Why or why not?

Q:

All money market instruments are long-term securities. True False Question 8 Investors in CMO securities are not exposed to prepayment risk. True False

Q:

(Compound annuity) What is the accumulated sum of each of the following streams of payments? a. $480 a year for 8 years compounded annually at 9 percent. b. $100 a year for 6 years compounded...

Q:

(Future value) Giancarlo Stanton hit 57 home runs in 2017. If his home-run output grew at a rate of 13 percent per year, what would it have been over the following 5 years