Present value


 

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Present value

The value today of a stream of payments and/or receipts over time in the future and/or the past, converted to the present using an interest rate. If Xt is the amount in period t and r the interest rate, then present value at time t=0 is V = St (Xt)/(1+r)t.

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.



Present value

Similar Matches

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.


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.


Present State

Present State

In a force field analysis, the description of an organization as it currently exists. It includes what happens in the organization, both formally and informally.


Present Value Index (PVI)

Present Value Index (PVI)

The ratio of the NPV of a project to the initial outlay required for it. The index is an efficiency measure for investment decisions under capital rationing.


Present value factor

Present value factor

Factor 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)].


Further Suggestions

AIMR Performance Presentation Standards Implementation Committee
Proportional representation
Appointed representative
Net present value
Net adjusted present value
Net present value rule
Net present value of growth opportunities
Present value of growth opportunities
company representative (tied agent)
Registered representative
Net present value (NPV)
net present value


 
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