Time Value of Money Flashcards
1
Q
Front
A
Back
2
Q
What’s time value?
A
Present value of future benefits in today’s dollars.
3
Q
What three things do you need to calculate NPV?
A
Value of the purchase, useful life of it, interest rate or discount rate To calculate write down the amount of your investment, the time period you want to analyze, the estimated cash flow for that time period, and the appropriate discount rate.The benefit of owning something over the useful life of it would be higher.
