--%>
Assignment Help - homework help

Introduction of the term net present value

Give a brief introduction of the term net present value? Write down its admittable rules, their merits and demerits?

E

Expert

Verified

Net present value (or NPV) is a financing word that illustrates the cash flow worth for both outflow and inflow and it is been stated as the sum of the present values of cash flow. NPV is formulated as prospect cash flow subtracted from the buy price. It is as well the tool to compute discounted cash flow and is a standardized method for the determination of capital budgeting. The merits and demerits of it are illustrated below:-

The advantage of NPV is required for long term projects and it evaluates the excess or shortfall of cash flows as it is employed for the reinvestment at the discount rate that is employed for this.

The advantage is that the amendment for this is a less risky and it adds a less of complexity in making the cost higher.

   Related Questions in Business Economics

  • Q : Why do governments enact trade barriers

    Why do governments enact trade barriers?

    		•
  • Q : The supply curve when each of these

    What happens to the supply curve when each of these determinants changes?

    		•
  • Q : Nation’s production possibilities curve

    Suppose that, based on a nation’s production possibilities curve, for 10,000 pizzas domestically an economy must sacrifice to get the one additional industrial robot it desires, but can get that robot from another country in exchange for 9,000 pizzas. To the fol

    		•
  • Q : Briefly state the pros and cons of

    Briefly state the pros and cons of Partnership?

    		•
  • Q : What are the determinants of supply

    What are the determinants of supply?

    		•
  • Q : What is the basic principle of

    What is the basic principle of comparative advantage?

    		•
  • Q : Restriction of laissez-faire government

    A laissez-faire government is restricted to finding: (1) property rights within a simple fashion and to enforcing private contracts. (2) market prices which guarantee equitable resource allocations. (c) how resources will be allocated efficiently. (4)

    		•
  • Q : Best illustration of a perfectly

    Which of the given is the best illustration of a perfectly competitive industry: w) wheat production. x) steel production. y) electricity production. z) airplane production. Hey friends please give your opinion for

    		•
  • Q : Define the for whom query in market

    The market system responses the “for whom?” query with: (i) distributing goods on the basis of require. (ii) using central planning to coordinate production decisions. (iii) catering to consumers with adequate resources to demand goods. (i

    		•
  • Q : Utility with food coupons Question: In

    Question: In Vancouver the Salvation Army encourages people to make food voucher donations to panhandlers instead of simply giving them cash. You can buy a food voucher for $5 and give it to a panhandler who can use it to purchase food. The Sa

    		•