What is net present value? Can it ever be negative? Explain.

Q: How can the Present-Worth Comparison be done?

A: The present worth method of comparison will diminish the cash flows of every choice to time zero by…

Q: What is the Future Value?

A: Future Value: It represents the future worth of the present amount and can be estimated by the…

Q: Can you make me a comparison and contrast of present value and future value?

A: Financial Accounting:- Financial accounting includes recording, summarizing and reporting a…

Q: What is the marginal rate of return? How is it calculated?

A: Answer: Marginal rate of return can be defined as the return obtained or received by means of…

Q: The excess present value method is anchored on the theory that the future returns, expressed in…

A: The excess present value method is also known as a net present value which required the present…

Q: What are the shortcomings of the internal rate of return criterion?

A: Solution- Internal Rate of Return (IRR)-      The Internal Rate of return (IRR) is that the discount…

Q: How did they calculate the present value?

A: The current value of the cash flow or stream of cash flow after discounting is termed as the present…

Q: How did you decide whether the situation is a profit or a loss?

A: A profit and loss (P&L) statement is a financial statement that details the revenues,…

Q: What is the horizon value? Why is it also called the terminal valueor continuing value?

A: Horizon value is the value of the expected dividend that will be received after the horizon date.

Q: what is the present value

A: The time value of money means that the amount of money received in the present period will have…

Q: What is the concept of present value? What is discounting?

A: Present value means value of future cash flows in todays terms.

Q: What is meant by the term abnormal rate of return?

A: Abnormal rate of return is return earned above or below the normal rate of return.

Q: What is the relationship between present value and future value?

A: Future Value : FV is that value which will be received in near future. Present Value : PV is that…

Q: What is current market value? Describe about it.

A: Market value: Market value is the price at which, both seller and buyer agree to exchange the…

Q: What is future value, FV?

A: Future Value: The future value is the value of the present amount compounded at an interest rate…

Q: Explain Present Value?

A: Present value is the current value of a future sum of money or value. Present value is useful to get…

Q: What is the present value

A: Present Value can be calculated using the following formula: Present Value = Annual cash flow /…

Q: What is discounting and compounding? What is the difference between them?

A: We need to use the equation of time value of money to explain the concept of discounting and…

Q: choose the best alternative A or B using net present worth method ?

A: The net present value is one of the modern methods used for evaluating the feasibility of a…

Q: wHAT IS PRESENT VALUE?

A: Present value also known as PV is the value of a future sum of money discounted at specified rate of…

Q: compare Future Value and Present Value?

A: The comparison between present value and future value is as follows:

Q: The difference between the expected return and the actual return is referred to as the unexpected…

A: The excess amount over invested value that an investor estimates to realize over horizon of…

Q: o you think a person would opt to use the Payback Period Method instead of the Net Present Value or…

A: Given information : . NPV refers to the difference between the sum of the present value of expected…

Q: Which project has no rate of return?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: e value?

A: Future value refers to the concept of comparing the expected outcome of a project or asset in the…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: What is the difference between positive and negative predictive value?

A: Positive predictive value is the probability that subjects with a positive screening test truly have…

Q: Define Present value and future value. If present value and future value are equal what is the rate?…

A: The time value of money is an important concept in finance which states that the money a person…

Q: Which of these is the present value?

A: Present Value: It is the present worth of the annual cash flows discounted at a rate of interest for…

Q: advantages of negative interest rate policies?

A: There are pros and cons of negative interest rate policies. In fact, in my opinion negative interest…

Q: What is Net realizable value?

A: Net realizable value means the amount that could be received after deducted all incidental expenses…

Q: Present Value versus Future Value

A: Present value is the amount at time "t=0". This is the value of an investment today or in present…

Q: . What is its present value?

A: Introduction: Compound interest can be defined as the interest on either a loan or a deposit which…

Q: What is Profit and Loss (PNL)?

A: A business organisation is established with an objective to make money and increase the worth of the…

Q: The DPBP is ideal as a stand-alone measure of economic worth. True or False?

A: Discounted Pay-Back Period or DPBP is period in which discounted value of future cash inflows is…

Q: What is market value?

A: Market value is the competitive price at which an asset will sell in the market. It is the highest…

Q: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: How does discounting, as used in determining present value, relate to compounding, as used in…

A: Future value equals the value of a deposit made today at a future date. Present value equals the…

Q: Why do some people say that MIRR should stand for Meaningless Internal Rate of Return?

A: Question is based on the concept of Business Finance

Q: What is the meaning of present value (PV

A: Present value could be a concept utilized by investors to calculate the current value of a firm's…

Q: Why do the payback period analysis fail to recognize the difference between the present and future…

A: Pay-Back (PB) Period is time in which Initial outlay related to proposed investment is completely…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.