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UNIT 41, image, image, image, image - Coggle Diagram
UNIT 41
B- Discounted cash flows
Discounting or reducing future cash flows to get their present valoes - in other words
The value of money decreases over time
Inflation
How much more it is worth to receive money now rather than in the future.
It is preferable to invest
.
A- Financing new investments
Financial planning
Project profitability
the amount of income
Each year
Financing of projects with own money
the probable rate of return
Government bonds
do we need loans?
C- Comparing
investment
returns
Investments
in new projects
NPV (net present value) :check:
Discounted to their present value :no_entry:
The initial investment :red_flag:
Discount rate
or capitalization rate
Increase :tada:
Risk :warning:
Compare
The internal
rate of return
(IRR)
The interest rate :red_flag:
Discount rate :red_flag:
Alternative
investments
