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Discounted payback period rule |
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Discounted payback period ruleAn investment decision rule in which cash flows are discounted at an interest rate and one determines how long it takes for the sum of the discounted cash flows to equal the initial investment.Discounted payback period rule Similar MatchesDiscounted rate mortgageDiscounted rate mortgageA mortgage which guarantees the interest rate charged will remain a set number of percentage points below the lender's standard variable rate. The rate changes as base rate moves up and down, but the relationship between base rate and the rate you pay remains constant. Discounted cashflowDiscounted cashflowA formula closely related to Net Present Value which springs from the idea that £1 received in ten years' time is not worth as much as £1 received now because the £1 received now could be invested for those ten years and compound into a higher value.Discounted cashflow applies a discount rate to future cashflows to establish their present worth. Added to the company's terminal value (i.e. what you'd get if you sold its assets), this gives you a total value for the whole business. Discounted dividend model (DDM)Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the present value of all expected future dividends. Discounted basisDiscounted basisTo sell below maturity value, so that the difference makes up all or part of the interest. Discounted paybackDiscounted paybackThe length of time needed to recoup the present value of an investment. Further SuggestionsDiscounted cash flow (DCF)Discounted in or by market |
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