Present value, Financial Management

Present Value

This is the current value of a future payment or stream of payments. The present value is calculated by applying a discount (capitalization) rate to the future payment(s). The present value techniques form the cornerstone of business or equity interest valuations and are also referred to as the discounted cash flow method or the discounted earnings method. It is broadly used by organization and investors to establish  the fair market value of a potential investment. It is extremely time-consuming to calculate current value manually, annuity tables, programmable calculators, and computer programs make the calculations simple and fast.

Posted Date: 10/16/2012 8:18:53 AM | Location : United States







Related Discussions:- Present value, Assignment Help, Ask Question on Present value, Get Answer, Expert's Help, Present value Discussions

Write discussion on Present value
Your posts are moderated
Related Questions
Q. What do you mean by synergy? Synergy: synergy refers to the greater combined value of merged firms than the sum of the values of individual units. It is something like one p

evaluate the importance of leverage in financial management of a small scale company

Why does a tax create a deadweight loss?  What determines the size of this loss? A tax makes deadweight loss by artificially increasing price above the free market level, so de

Government securities are the most important and unique financial instruments in the financial markets of any economy. Government of India Securities (GOI Sec) in

How does the market determine the fair value of a bond? The fair value of a bond is a present value of the bond's coupon interest payments plus the present value of the face va

The issuer will not have to disclose the rating to the public. The firm can, either independently or with the help of its investment banker, assess its shadow

How can we measure a company's cost of capital in emerging nations, especially when there is no state bond which we could take as a reference? Although there is no state bond w

Given below are the cash flows of a project. Find out the net present value of the project. Cost of capital is 18% and initial investment is Rs. 2,00,000. Year Cash Flows (lakhs)

In the case of dual currency bonds, the interest is paid in one currency, while the principal repayment is made in another currency. Deep Di

A total of $426,000 seed-funding would be ideal to start the project on a local basis. The cost analysis done above is for the material required to perform the work, and as the wor