Question

While calculating the net present value under discounted cash flow method of return on investment analysis, the calculations involved are 1. Cash outflow
2. Discounted net cash flow
3. Cash inflow
4. Net present value
The correct sequence of these calculations is

• A. 4, 1, 3, 2
• B. 1, 3, 2, 4
• C. 1, 2, 3, 4
• D. 3. 1, 4, 2

Answer 1

The correct option is B 1, 3, 2, 4

Discounted cash flow can be defined as a valuation method used to estimate the value of an investment based on its future cash flow. While calculating the net present value under discounted cash flow method of return on investment analysis, the calculations involved are :
a) Cash outflow
b) Discounted net cash flow
c) Cash inflow
d) Net present value