Difference between revisions of "Net Present Value"
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| − | Net Present Value is a method to estimate the current value of future cash flows. | + | '''Net Present Value''' is a method to estimate the current value of future cash flows. |
In its simplest form, Net Present Value applies a discount rate to a future cash flow number and the product is the Net Present Value. | In its simplest form, Net Present Value applies a discount rate to a future cash flow number and the product is the Net Present Value. | ||
Revision as of 19:46, September 10, 2007
Net Present Value is a method to estimate the current value of future cash flows. In its simplest form, Net Present Value applies a discount rate to a future cash flow number and the product is the Net Present Value.
The discount rate may have many components; Internal Rate of Return (IRR), Cost of Capital, Cost of Debt, Risk, and so on.