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What is normally used as the discount rate in the net present value method?
the net present value as determined by normal discount rate is 10%
Does present values have value adding up property?
Net present value method has value adding-up property
What is a fisher rate?
Exchange of benefits in applying the net present value method
What is the difference between the net present value and the discounted cash flow method?
cash method is when you get cash, method is when u give it
What is a capital investment's net present value?
Widely used approach for evaluating an investment project. Under the net present value method, the present value (PV) of all cash inflows from the project is compared against the initial investment (I). The net-present-valuewhich is the difference between the present value and the initial investment (i.e., NPV = PV - I ), determines whether the project is an acceptable investment. To compute the present value of cash inflows, a rate called the cost-of-capitalis used for discounting. Under the method, if the net present value is positive (NPV > 0 or PV > I ), the project should be accepted.
Explain why Net Present Value method is more famous academically while Internal Rate of Return method of evaluating investments is applied by most firms in practice?
What is presesent value
Why is net present value method theoretically superior to internal rate of return method?
Well they both have different properties. You would have to research to find the difference.
How firms can learn about net present value NPV from the stock market?
by using the basic net present value
What does the NPV function do in Excel?
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)
What are the three capital expenditure techniques?
Internal rate of return, net present value, accounting rate of return and payback method.
Why it is interpollation used in internal rate of return method?
Interpolation method is used to know the exact point or rate of return where NPV(net present value) of investments is zero.
Investment Appraisal Methods?
The Payback method is one of the investment appraisal methods. Other methods to appraise investments are the Average Rate of Return and the Net Present Value method.
