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by using the basic net present value
You use the NPV function. Start by specifying the rate and follow it with a list of future values that you want to help determine your result. So you could have something like this:=NPV(5%,10,20)
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
1. Net purchases +? = cost of goods purchased 2. Net purchases = ? + ? = purchases
the net present value as determined by normal discount rate is 10%
Net Present Value
Net present value method has value adding-up property
$187.04 billion
Net Present Value (NPV) means the difference between the present value of the future cash flows from an investment and the amount of investment.Present value of the expected cash flows is computed by discounting them at the required rate of return. For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at net present value which here is zero ($1,000-$1,000).A zero net present value means the project repays original investment plus the required rate of return. A positive net present value means a better return, and a negative net present value means a worse return.
The most common use of the acronym NPV is to refer to net present value. Net present value is the sum of the present values of individual cash flows of the same entity.
A net present value profile charts the net present value of a business activity as a function of the cost of capital. This comparison allows decision makers to determine the profitability of a project or initiative in different financing scenarios, enabling more effective cost-benefit planning.
It means: Net Present Value of Growth Opportunities