what is the effect of making changes to net present value calculations

Q: Calculate the Net Present Value

A: Introduction: NPV or net present value is one of the capital budgeting methods & involves…

Q: i. The net present value ii. The internal rate of return commend the decision to be made

A: Since in the given case the IRR is higher in machine 1 so it is to be selected.   Assumptions: We…

Q: present value is the

A: https://docs.google.com/document/d/19Usy902_lK6tWQ3RgtQiUedGybbYnqlidq6sySnT8YI/edit

Q: Define the term capitalized cost?

A: A Capitalized Cost is the cost incurred in the purchase and financing of fixed assets. It includes…

Q: Difference between present value and net present value.

A: Present value (PV) is the current value of a future sum of money or stream of cash flow given a…

Q: Why does the time value of money component arise?

A: Time value of money: The value of amount on hand today is more value than the value of amount…

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: What is net present value?

A:

Q: What is the meaning of economic value added (EVA)? What does it measure? Why is it important?

A: Economic value added ("EVA") measures a company's financial performance based on the excess wealth…

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Give me the formula of net present value

A: Net Present Value of a project is equivalent to the difference between the present value of cash…

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 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 a capitalization rate? What are the different ways of arriving at this rate for an…

A: Capitalization rate: Capitalization rate is the projected rate of return percentage that a property…

Q: What is limitation of Payback period, Net Present Value (NPV) and Internal rate of return (IRR).…

A: i) Payback period: Payback period is the expected time period which is required to recover the cost…

Q: Explain the net present value formula and also explain what the net present value represents.

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

Q: Compare the process of compounding to determine future values and the process of discounting to…

A: The concept of time money provides information as every unit value of money will decreasing its…

Q: a present value is converted to a future value through compounding, explain this to me.

A: Present value (PV) is the amount of money one is having today. Future value (FV) is how much money…

Q: How do you calculate present value?

A: Present value:Present value (PV) refers to the current value of future money.

Q: Define the term present Value.

A: Future Value: The future value means that value of the investment which will be realized in the…

Q: Explain the purpose of the net present value.

A: Capital budgeting involves taking decisions related to investments in long-term assets or investment…

Q: Explain an example how to calculate net present value.

A: Net present value method:   Net present value method id the method which is used to compare the…

Q: The net present value f

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: Explain an example how to calculate rate of return on total assets.

A:

Q: What should be done to find the equivalent present worth of the actual dollar amount?

A: Present value is the concept of discounting future value to bring it to today’s worth.

Q: What is the relation between the present value of an investment and time and interest rate?

A: The concept of present value of an investment and time and interest rate is an important concept of…

Q: What is the definition of “actuarial present value”?

A: Accumulated Benefit Obligation: It is an inexact rate of a company's pension plan liability towards…

Q: Explain the difference between return of investment versus return on investment.

A: The ratio analysis helps to analyze the financial statements of the business.

Q: What is the net present value method?

A: Net Present Value Method: It is the present value of the annual cash flows and the project initial…

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: How should changes in the estimated unguaranteedresidual value be handled by the lessor?

A:

Q: Describe the process of Calculating Present Worth?

A: Step-1: The initial invested amount should be ascertained and the initial investment is the sum…

Q: What is future Value of present sum

A: Future value is the value of what a certain asset/cash/instrument will be worth at a future…

Q: Determine the present worth of the series. Determine the future worth

A: Present Value = Cash Flow(1+i)n Future Value = Cash Flow x (1+i)n where, i= Interest rate n= period

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: Define the present value of a single amount.

A:

Q: Explain the effects of interest rate and period in the calculation of present value and future…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Discuss the advantages and disadvantages of the Net present value

A: Net present value is the method of capital budgeting that helps in determining the present value of…

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: Return on Plan Assets?

A: Every business needs to incur expenses for paying retirement benefits to the employees. Companies…

Q: What is net present value? How does net preset value work?

A: Net present value:- Net present value is the investment evaluation technique, where we evaluate…

Q: What is Net Present Value (NPV)?

A: Time value of money: Time value of money refers to the concept that the value of money available at…

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: What reinvestment rate is built into the NPV calculation? The IRR calculation?

A: Capital budgeting is a method of investment appraisal. It is a method used for finding the…

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.