5.2 Present Value and Discounting

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

Discount factor

1/(1+r)^t

Discounted cash flow (DCF) valuation

Calculating the present value of a future cash flow to determine its worth today

PV formula

PV = FV x [1/(1+r)^t] FV = future value r = interest rate t = periods

Present Value (PV)

The current value of future cash flows discounted at the appropriate discount rate - discounting money back to the present

Discount rate

The rate used to calculate the present value of future cash flows

Discount

To calculate the present value of some future amount


संबंधित स्टडी सेट्स

Geography Chapter 7 and 8 Review

View Set

Intellectual Property (Module #6)

View Set

Basic Anatomy and Circulation (Session 2)

View Set

Personal Finance Chapter 6- Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

View Set

chapter 6: Group Health Insurance

View Set

Psychology- Chapter 7: Thinking, Language, and Intelligence

View Set