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An analyst moves a future cash flow backwards along a timeline to state it in today's money. That step is called:

ADiscounting
BCompounding
CConverting
DCorrecting
Answer & Solution
Correct answer: A. Discounting
1. Moving forward on a timeline builds value up and is compounding. 2. Moving backward strips the growth back out again. 3. That backward step is discounting. _Source: OpenStax Principles of Finance 2e, Chapter 8, Time Value of Money II._
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