The Net Present Value Method Is a Discounted Cash Flow

question 106

True/False

The net present value method is a discounted cash flow method that concentrates only on cash flows.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.

Retained Use

The continued use of an asset by its owner instead of selling or replacing it.

Basic Earnings Per Share

A measure of a company's profitability, calculated by dividing net income by the average number of common shares outstanding during the period.

Income Available

The amount of net income left over for the company after it has paid out dividends to its shareholders.