Definition of present value in English English dictionary
present worth (of a sum payable in the future) calculated by deducting interest that will accrue between the present and future date
(Ticaret) The estimated current value of a future receipt or payment, as calculated by the assumed interest rate between the current date and the date the future transaction will occur
The principal which, drawing interest at a given rate, will amount to the given sum at the date on which this is to be paid; thus, interest being at 6%, the present value of $106 due one year hence is $100
The present value of a project or an investment decision determined by summing the discounted incoming and outgoing future cash flows resulting from the decision
The present value of an investment's future net cash flows minus the initial investment. If positive, the investment should be made, otherwise it should not; time value of money
A capital budgeting approach in which the present value of expected future cash inflows is subtracted from the present value of outflows to determine the "net" present value
The future stream of benefits and costs converted into equivalent values today This is done by assigning monetary values to benefits and costs, discounting future benefits and costs using an appropriate discount rate, and subtracting the sum total of discounted costs from the sum total of discounted benefits [GAO]
(Also known as NPV ) The cost of a product or system calculated in the present-day currency Relex Life Cycle Cost (LCC) enables NPV calculations, to determine if a particular cost would be better incurred in the present year, or at a future date when costs may be lower
An approach used in capital budgeting where the present value of cash inflow is subtracted from the present value of cash outflows NPV compares the value of a dollar today versus the value of that same dollar in the future after taking inflation and return into account
a method which discounts all the cash inflows and outflows over the life of the project to their present value The choice of discount rate reflects the cost of capital (see also: Discounted Cash Flow; Discount Rate; Internal Rate of Return)
Method used in comparably evaluating investments in very dissimilar projects by discounting the current and projected future cash inflows and outflows back to the present value based on the discount rate, or cost of capital, of the firm
The NPV equals the present value of the cash inflows minus the present value of the cash outflows with the cost of capital used as a discount rate This method is used to evaluate capital budgeting projects If the NPV is positive, a project should be accepted
this is a value calculated in cost benefit analysis The NPV discounts all the cash inflows (income) and outflows (payments) over the life of the project to their present day value The choice of discount rate reflects the cost of capital (see also: Time Value of Money; Discounted Cash Flow; Discount Rate; Internal Rate of Return)
NPV establishes what the value of future earnings is in today's money To do the calculation you apply a discount % rate to the future earnings The further out the earnings are (in years) the more reduced the net present value
The present value of a series of cash flows generated by an investment, minus the initial investment NPV is calculated because of the important concept that "money today is worth more than the same money tomorrow "
- the current value of net benefits (benefits minus costs) that occur over time A discount rate is used to reduce future benefits and costs to their present time equivalent
The difference between the present value of the benefit stream and the present value of the cost stream for a project The net present value calculated at the Banks discount rate should be greater than zero for a project to be acceptable
The estimated change in the value of the firm that would occur if a project is accepted based on subtracting the present value of the inflows from the present value of the outflows
The value of the future stream of benefits from an investment discounted to the present by means of a discount rate (or interest rate) The discount rate should reflect the opportunity cost of the resources devoted to the investment - what the resources could have earned if they had been invested elsewhere
The value, in today's dollars, of a series of costs and incomes over a time period that have been discounted to the present using a chosen discount interest rate If the NPV is positive, the investment would earn a profit after repaying the interest costs (based on the chosen interest rate) If the NPV is negative the investment will not earn a sufficient profit to pay the chosen interest rate