If Future Cash Flows Are Not Discounted the Effect in the Financial

question 40

Multiple Choice

If future cash flows are not discounted the effect in the financial statements is to:

• A) Report amounts of cash outflows that are the same but occur over different time periods as the same amount.
• B) Report net cash flows at their future value rather than their present value.
• C) Understate the amount of the present obligation.
• D) Report net cash flows at their future value rather than their present value and understate the amount of the present obligation
• E) None of the given answers.

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