To Account for Risk an Alternative to Adjusting the Discount

question 47

True/False

To account for risk an alternative to adjusting the discount rate is the certainty equivalent which adjusts the cash flows.

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Definitions:

Credits

Accounting entries that increase liability or equity accounts, or decrease asset or expense accounts.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of assets, provision of services, or other means.

Debits

Accounting entries that result in an increase in assets or expenses and a decrease in liabilities, equity, or income.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet.