3.3.2 Investment appraisal Flashcards

1
Q

What is Net Present Value?

A

Cash Flow X Discount Value

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2
Q

Advantages of NPV?

A
  1. Takes into account of time value of money
  2. Looks at all the cash flow involved throughout the life of the project
  3. Use discount rates reduces the impact in the long term, less likely cash flow
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