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Difference between present value and net present value?

Present value is the result of discounting future amounts to the present. For example, a cash amount of $10,000 received at the end of 5 years will have a present value of $6,210 if the future amount is discounted at 10% compounded annually.Net present value is the present value of the cash inflows minus the present value of the cash outflows. For example, let's assume that an investment of $5,000 today will result in one cash receipt of $10,000 at the end of 5 years. If the investor requires a 10% annual return compounded annually, the net present value of the investment is $1,210. This is the result of the present value of the cash inflow $6,210 (from above) minus the present value of the $5,000 cash outflow. (Since the $5,000 cash outflow occurred at the present time, its present value is $5,000.)


Do bonds usually sell at their maturity value?

no they sell at their present value


What is the present value of 100000- Yuz Bin in INR?

Present Value of 100000 Yuz Bin is worth Rs. 32,78,398.51 INR.


Is the issue price of bonds equal to the present value of the principal plus the present value of the interest?

The price of bonds are not equal to the present value and principal upon purchase. The interest is accrued over a certain time period, then collected.


What is the meaning of expected net present value?

It is the expected value of all cash flows of a project brought back to the present value, by discounting it by the cost of capital involved in the project.

Related Questions

What is the importance of MIS in present scenario?

importance of MIS in the present scenario


What is the importance of studying future value and present value concepts?

Examples of Capital resources are a painter,accountant,doctor,nurse,waitress and a soft ware programmer.It's basically a person who has a occupation.


Is the present value factor the exponent of the future value factor?

The present value factor is the exponent of the future value factor. this is the relationship between Present Value and Future Value.


How is the future value related to the present value of a single sum?

The present value is the reciprocal of the future value.


If you want to find the present value of an investment you should choose the financial function?

You can use the PV function or the NPV function. Present Value is the result of discounting future amounts to the present. Net Present Value is the present value of the cash inflows minus the present value of the cash outflows.


What is the relationship between the present value factor and annuity present value factor?

Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.


What is the relationship between present value factor and annuity present value factor?

Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.


Discuss the Concept of customer value and its importance to successful marketing?

discuss the concept of customer value and its importance to markeking


Difference between present value and net present value?

Present value is the result of discounting future amounts to the present. For example, a cash amount of $10,000 received at the end of 5 years will have a present value of $6,210 if the future amount is discounted at 10% compounded annually.Net present value is the present value of the cash inflows minus the present value of the cash outflows. For example, let's assume that an investment of $5,000 today will result in one cash receipt of $10,000 at the end of 5 years. If the investor requires a 10% annual return compounded annually, the net present value of the investment is $1,210. This is the result of the present value of the cash inflow $6,210 (from above) minus the present value of the $5,000 cash outflow. (Since the $5,000 cash outflow occurred at the present time, its present value is $5,000.)


How do you define the value of value?

I need a answer how do you know when to use future value or present value and future value of a annuity and present value of annuity Please help


What is the importance of business in present world?

The importance of business is that it provides products or services to customers. These products or services in the present day world are provided by entrepreneurs.


Examples of order of importance?

i think that order of importance is a list of important sequece in importance value