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Sagot :
The discount value of a specific stream of net income will equal the total of the actual costs of all of the individual cash flows when comparing to the sum of the positive cash flows received in nominal dollars throughout time.
What distinguishes Net Present Value from discounted cash flow?
They aren't the same, though. You can calculate the present value of predicted cash flows using the discounted cash flow analysis. After deducting beginning expenditures, your investment's net return is indicated by the Net Present Value.
How can you compare the cash flow that will be received at various times?
Using a time line that displays both the timing and the magnitude of each cash flow in a stream makes it easier to deal with cash flows that are occurring at various points in time. So, on a timeline like the one below, a cash flow stream of $100 at the conclusion of each of the following four years can be shown.
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