Which concept refers to the present worth of future cash flows adjusted for discount rate?

The concept referring to the present worth of future cash flows adjusted for the discount rate is known as present value. Present value is a financial principle that allows for the comparison of cash flows occurring at different times. It considers the time value of money, which is the idea that a certain amount of money today is worth more than the same amount in the future due to its potential earning capacity.

By applying a discount rate, present value calculates what future cash flows are worth in today's terms. This adjustment is crucial for investment decisions, as it helps stakeholders evaluate the attractiveness of various projects or cash flow streams by translating future income into its current equivalent. Through present value, decision-makers can analyze whether the future cash flows will deliver returns that justify the initial investment.

In contrast, the other options do not encapsulate this concept effectively. The payback period measures the time it takes to recover an investment but does not account for the time value of money. Opportunity costs refer to the benefits foregone when choosing one alternative over another, while objectives pertain to the goals or targets of a project and do not relate to financial evaluations directly.