# The process of restating future cash flows in today’s dollars is known as: 34. The process of restating future cash flows in today’s dollars is known as: A. Budgeting. B. Annualization. C. Capitalizing. D. Payback period. E. Discounting. project requires a \$30,000 investment and is expected to generate end-of-period annual cash inflows as follows: Year 1 Year 2 Year 3 Total \$12,000 \$8,000 \$10,000 \$30,000 Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below: i 10% n=1 .9091 | 9264 7513 i=10% n=3 i= 10% A. \$0.00 B. \$21,000.00 C. (\$7,461.00) D. \$25,033.32 E. (\$4,966.68)

34.E.Discounting.
Discounting means stating the future cash flows in present value
terms.
Budgeting is estimation of revnues and expenses of a future
period.
Annualisation is turning percentages for periods less than a
year into annual percentages.
Capitalising meains recording an expense as a capital item.
Payback period is the period by which initial investment is
recovered in cash.
35.E.(\$4,966.68)
The following is the calculation of NPV:

 year cash flow discounting factor cashflow *discounting factor 0 -\$30,000 1 (30,000) 1 12,000 0.9091 10,909.20 2 8,000 0.8264 6,611.20 3 10,000 0.7513 7513 NPV (\$4,966.6)