Discounted-Cash-Flow Models Are Not Based on the Theory of Compound

question 78

True/False

Discounted-cash-flow models are not based on the theory of compound interest.

---

Definitions:

Financial Lease

A type of lease in which the lessee has use of the asset for most of its useful life, and the lease payments are designed to cover the lessor's purchase costs and provide a profit.

Lessor

The group that provides a property or asset for lease to another group, identified as the lessee.

Nonrecourse Basis

Nonrecourse Basis refers to a type of financing or lending where the borrower is not personally liable beyond the collateral for the loan.

Lessor

The party in a lease agreement who owns the leased asset and grants the lessee the right to use the asset in return for periodic payments.