|
|
Net present value rule |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Net present value ruleAn investment is worth making if it has a positive NPV Projects with negative NPVs should be rejected.Net present value rule Similar MatchesCompany representative (tied agent)Company representative (tied agent)A financial services sales rep, authorised to give financial advice on life assurance, pensions and unit trusts, but only allowed to recommend products from his/her employer. Unlike, IFAs, therefore, tied agents cannot be assumed to give impartial advice.Under the Financial Services Act 1986 all financial advisers must tell prospective clients whether they are tied agents or independent, so that the client knows what kind of advice he is getting.Tied agents are regulated by the Financial Services Authority (FSA). Adjusted present value (APV)Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity (present value of unlevered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leveraged buyout. Present valuePresent valueThe amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a present value factor. For example, if the opportunity cost of funds is 10%, the present value of $100 to be received in one year is $100 x [1/(1 + 0.10)] = $91. Present value factorPresent value factorFactor used to calculate an estimate of the present value of an amount to be received in a future period. If the opportunity cost of funds is 10% over next year, the factor is [1/(1 + 0.10)]. Registered representativeRegistered representativeA person registered with the CFTC who is employed by and solicits business for a CFTC or CFTC. Further SuggestionsPresent StateProportional representation Present value net present value AIMR Performance Presentation Standards Implementation Committee Net present value Net present value (NPV) Net adjusted present value Registered Representative Appointed representative Present Value Index (PVI) Present value of growth opportunities Net present value of growth opportunities |
|
|
|