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In the discounted cashflow method, the discount rate is used for the following reasons EXCEPT a. it removes the timing differences of cashflows. b. it serves as the required rate of return of the asset being valued. c. it removes the expected riskiness of differing assets d. it equalizes cash inflows to cash outflows so that the value would equal to the market value.

In the discounted cashflow method, the discount rate is used for the following reasons EXCEPT a. it removes the timing differences of cashflows. b. it serves as the required rate of return of the asset being valued. c. it removes the expected riskiness of differing assets d. it equalizes cash inflows to cash outflows so that the value would equal to the market value.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 15MC: The IRR method assumes that cash flows are reinvested at _________. A. the internal rate of return...
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In the discounted cashflow method, the discount rate is used for the following reasons EXCEPT

a. it removes the timing differences of cashflows.
b. it serves as the required rate of return of the asset being valued.
c. it removes the expected riskiness of differing assets
d. it equalizes cash inflows to cash outflows so that the value would equal to the market value.

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