Net present value

 

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Net present value

Same as present value, being sure to include (negative) payments as well as (positive) receipts.

Net present value

A 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.



Similar Matches

Present value

Present value

The 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.


Registered Representative

Registered Representative

Also 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 value (NPV)

Net present value (NPV)

The present value of the expected future cash flows minus the cost.


AIMR Performance Presentation Standards Implementation Committee

AIMR Performance Presentation Standards Implementation Committee

The Association for Investment Management and Research (AIMR) Performance Presentation Standards Implementation Committee is charged with the responsibility to interpret, revise, and update the AIMR Performance Presentation Standards (AIMR-PPS(TM) for portfolio performance presentations.


Appointed representative

Appointed representative

Salesperson, company or organisation that advises on the investment products specific to one life assurance or investment company.


Further Suggestions

Registered representative
Adjusted present value (APV)
Net present value of growth opportunities
Present value
Present value factor
Present State
company representative (tied agent)
Present Value Index (PVI)
Net present value rule
Proportional representation
Present value of growth opportunities
Net adjusted present value


 
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