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Net present value rule |
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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 MatchesNet present valueNet present valueSame as present value, being sure to include (negative) payments as well as (positive) receipts. Registered RepresentativeRegistered RepresentativeAlso known as account executive, customers' broker, or similar title. Describes full-time New York Stock Exchange member organisation sales people who have met the NYSE background and industry knowledge requirements. Net present valueNet present valueA calculation which is based on 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.The NPV calculation establishes what the value of future earnings is in today's money. To do the calculation you apply a discount % rate to the future earnings. The further out the earnings are (in years) the more reduced their present value is.NPV is at the heart of securities analysis. Analysts use predictions of a company's future earnings and dividend payments, appropriately discounted back to current value, to establish a 'fundamental' value for the shares. If the current share price is below that value, then the shares are, on the face of it, attractive, If lower, they are 'overvalued'. In practice the analysis is more sophisticated, but it is based on the concept of NPV. Company 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). Net adjusted present valueNet adjusted present valueThe adjusted present value minus the initial cost of an investment. Further SuggestionsAIMR Performance Presentation Standards Implementation CommitteePresent value Present Value Index (PVI) Present value Net present value of growth opportunities Adjusted present value (APV) Proportional representation Present value factor Registered representative Net present value (NPV) Present State Appointed representative Present value of growth opportunities |
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