Question

Which of the following methods of project analysis is defined as computing the value of a project based on the present value of the project based on the present value of the project's anticipated cash flows?

a. constant dividend growth model
b. discounted cash flow valuation
c. average accounting return
d. expected earnings model
e. internal rate of return

Answer 1

Answer: discounted cash flow valuation

Explanation:

The discounted cash flow valuation is a method of project analysis that is defined as computing the value of a project based on the present value of the project based on the present value of the project's anticipated cash flows.

Discounted cash flow is used to determine an investment's value based on the future cash flows that the investment will bring.