File Name: present value questions and answers .zip
- Present Value (PV)
- Net present value method
- CHAPTER 7 NET PRESENT VALUE AND OTHER INVESTMENT CRITERIA Answers to Concept Questions
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Present Value (PV)
Net Present Value Analysis is a financial cash flow analysis technique that helps in project selection. Moreover, NPV project selection criteria falls under the classification of benefit measurement method. Further, NPV analysis uses discounted cash flow technique to assess project profitability. In fact, major advantage of net present value method is that it uses the concept of time value of money. However, this post describes the essential NPV calculation steps.
Net present value method
Net present value method also known as discounted cash flow method is a popular capital budgeting technique that takes into account the time value of money. It uses net present value of the investment project as the base to accept or reject a proposed investment in projects like purchase of new equipment, purchase of inventory, expansion or addition of existing plant assets and the installation of new plants etc. First, I would explain what is net present value and then how it is used to analyze investment projects. Net present value is the difference between the present value of cash inflows and the present value of cash outflows that occur as a result of undertaking an investment project. It may be positive, zero or negative.
Learn cash flow analysis, net present value, profitability index test prep for online bachelor degree programs in business administration. Practice merit scholarships assessment test, online learning net present value quiz questions for competitive in business majors to learn free online courses. MCQ : In capital budgeting, the positive net present value results in. MCQ : The project whose cash flows are sufficient to repay the capital invested for rate of return then the net present value will be. MCQ : The first step in calculation of net present value is to find out. MCQ : In capital budgeting, a technique which is based upon discounted cash flow is classified as.
CHAPTER 7 NET PRESENT VALUE AND OTHER INVESTMENT CRITERIA Answers to Concept Questions
If money earns an annual rate of 6. How much is the interest earned? The family agrees to pay the loan off by making monthly payments over a 15 year period. How much should the monthly payment be in order to pay off the debt in 15 years?
This new lottery, however, will pay out the award 60 years from today. How much did he originally borrow? Future Value and Present Value Tables. Principles of Accounting.
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