Determine net present value according to ezra solomon, Financial Management

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Determine Net present value according to Ezra Solomon

"The gross present worth of a course of action is equal to the capitalised value of the flow of future expected benefit, discounted (or capitalised) at a rate which reflects their certainty or uncertainty. Wealth or net present worth is the difference between gross present worth and theamount of capital investment required to achieve the benefits beingdiscussed. Any financial action which creates wealth or which has a netpresent worth above zero is a desirable one and should be undertaken.Any financial action which does not meet this test should be rejected.

 


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