--%>
Assignment Help - homework help

Introduction of the term net present value

Give a brief introduction of the term net present value? Write down its admittable rules, their merits and demerits?

E

Expert

Verified

Net present value (or NPV) is a financing word that illustrates the cash flow worth for both outflow and inflow and it is been stated as the sum of the present values of cash flow. NPV is formulated as prospect cash flow subtracted from the buy price. It is as well the tool to compute discounted cash flow and is a standardized method for the determination of capital budgeting. The merits and demerits of it are illustrated below:-

The advantage of NPV is required for long term projects and it evaluates the excess or shortfall of cash flows as it is employed for the reinvestment at the discount rate that is employed for this.

The advantage is that the amendment for this is a less risky and it adds a less of complexity in making the cost higher.

   Related Questions in Business Economics

  • Q : Describe Low financial leverage and low

    Describe briefly Low financial leverage, low operating leverage?

    		•
  • Q : Case study plz find the attachment and

    plz find the attachment and dont compromise on quality,, no similarity n need to be done according to requierment...

    		•
  • Q : Decomposition of Private Sector Can

    Can someone help me in finding out the right answer from the given options. The private sector is decomposed into: (1) Businesses and investors. (2) Households and stockholders. (3) Households and investors. (4) Businesses and households.

    		•
  • Q : New firms entry in industry What

    What persuades new firms to enter in an industry? Answer: Abnormal profit encourages new firms to enter an industry. 

    		•
  • Q : Generalization and abstraction are

    Explain the statement: “Generalization and abstraction are nearly synonymous.”?

    		•
  • Q : Gains from the Exchange Even people who

    Even people who are extremely good at everything couldn’t encompass: (i) absolute benefits in approximately everything. (ii) Much higher incomes than average. (iii) Comparative benefits in everything. (iv) Superior natural endowments of talent.

    Q : Entertainment tax-Indirect tax Why

    Why entertainment tax comes in indirect tax? Answer: Since its burden can be shifted to others.

    		•
  • Q : Effects of that depreciation or

    Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or appreciate?  Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports?

    		•
  • Q : Nation’s production possibilities curve

    Suppose that, based on a nation’s production possibilities curve, for 10,000 pizzas domestically an economy must sacrifice to get the one additional industrial robot it desires, but can get that robot from another country in exchange for 9,000 pizzas. To the fol

    		•
  • Q : Define the ability of goods by wealth

    According to Adam Smith nation's wealth is, not the gold this possesses, but somewhat it’s: (1) number of people. (2) capability to give goods for its people. (3) foreign investments. (4) domestic financial capital. (5) militar

    		•