Present value definition

Preliminary estimates, 160-162 Preparation of reports, 459-471 Present value definition of 277 method for, 304-308 (See also Present worth)... 

Since such expressions are of the same value as the analytically derived ones, it is always necessary to present the definition ... 

It is often necessary to determine the amount of money which must be available at the present time in order to have a certain amount accumulated at some definite time in the future. Because the element of time is involved, interest must be taken into consideration. The present worth (or present value) of a... 

One special form of an annuity requires that payments be made at the beginning of each period instead of at the end of each period. This is known as an annuity due. An annuity in which the first payment is due after a definite number of years is called a deferred annuity. Determination of the periodic payments, amount of annuity, or present value for these two types of annuities can be accomplished by methods analogous to those used in the case of ordinary annuities. 

Line 13 gives the annual cash flows for each of the operating years with the zero-year column giving only the total capital investment. In line 16, the present value of the annual cash flows to the project is obtained by summing the individual present values for each year of operation including the present value of the working-capital and salvage-value recovery at the end of the service life. Line 17 merely applies the definition of net present worth as used in this text as the difference between the total present value of the annual cash flows to the project and the initial required investment. 

The definition of net cash flow (NCF) for capital budgeting purposes is after tax cash flows from operations discounted at the present value of the cost of capital.26 In net present value analysis the cost of capital is a pre determined value based on the opportunity cost of capital. The cost of capital is defined as a weighted average cost of capital (WACC) and takes into account the firm s capital structure, the cost of equity and debt capital, and tax rates. The formula for the weighted average cost of capital (WACC) is... 

Equation (3-10) is the present operational definition of pH and is recommended by the International Union of Pure and Applied Chemistry. The value of pH, is determined once and for all by careful measurements of cells such as... 

In an economic evaluation of a project, it is often necessary to evaluate the present value of funds that will be received at some definite time in the future. The present value (PV) of a future amount can be considered as the present principal at a given rate and compounded to give the actual amount received at a future date. The relationship between the indicated future amount and the present value is determined by a discount factor. Discounting evaluates each year s flow on an equal basis. It does this by means of the discount, or present value factor, and the reciprocal of the compound interest factor (1 -(- i)" with... 

Certainty equivalent approach (Keown etal., 2002) In this approach a certainty equivalent is defined. This equivalent is the amount of cash required with certainty to make the decision maker indifferent between this sum and a particular uncertain or risky sum. This allows a new definition of net present value by replacing the uncertain cash flows by their certain equivalent and discounting them using a risk-free interest rate. 

Risk-adjusted NPV (RPV) (Keown etal, 2002) This is defined as the net present value calculated using a risk-adjusted rate of return instead of the normal return rate required to approve a project. However, Shimko (2001) suggests a slightly different definition where the value of a project is made up of two parts, one forms the not at risk part, discounted using the risk-free return rate, and the other forms the part at risk discounted at the fully loaded cash plus risk cost. 

The following example illustrates the effects of inflation on borrowing funds. This analysis is similar to any contract signed for future services because the cash flows are agreed upon and therefore represent out-of-pocket expenses. Thus, by definition, these expenses are actual doUar cash flows. The following example illustrates the required calculations to determine the net present value or rate of return for a project. 

The regulations say that impurities are not manufactured or processed for distribution in commerce as chemical substances per se. i This means that the impurities are essentially hitchhikers that travel along with the chemical substance that is intentionally present. This definition leaves open substantial questions about what is intentionally present. For example, if an impurified product functions for its purpose, but the purified product does not, then the impurities are necessary for the success of the product and can not be considered unintentionally present. The EPA has taken the position in a Q A document that if an impurity enhances the product or is manufactured itself for a commercial purpose, it would no longer be viewed as an impurity. Similarly, if a company learns that something it had thought was an impurity in fact has some coimnerdal value, then that substance must be put on the Inventory. ... 

The current chapter first presents some definitions of terms such as values , norms , attitudes and beliefs . It then focuses on how these factors relate to behavioural issues in the context and practice of safety management. Ortwin Renn has already discussed societal norms in relation to policy making by government and industry in Chapter 2 in this volume. In addition to the concept of societal norms, this chapter discusses national culture and how it can influence safety culture in the oil and gas industry. Finally, the chapter compares and contrasts the safety culture of the oil and gas industry with that of another industry, air traffic management (ATM), which is considered to be one the safest industries in the world. The possibility of learning lessons from this high-reliability industry are discussed. 

A swap s fixed-rate payments are known in advance, so deriving their present values is a straightforward process. In contrast, the floating rates, by definition, are not known in advance, so the swap bank predicts them using the forward rates applicable at each payment date. The fotward rates are those that are implied from current spot rates. These are calculated using equation (7.6). 

From this it is easy to derive the definition of true yield, which is the discount rate that equates a bond s current market price to the present value of its cash flows. The bond s market price is its dirty price—that is, the price including accrued interest. This is represented in (16.4), where PV is replaced by P, representing the clean price plus AI, representing accrued interest. 

Finally, a last property has been evidenced very recently. The magnetization in the superparamagnetic state has been studied vs. H pp on y-Fe203 particles in a polymer. The effect of H pp is the same for samples with Q = 0.008 and = 0.20, independently of the H pp direction, which means that it does not depend on the interparticle interactions and is only related to the properties of a single particle. A small increase in Qp vs. H pp is observed while a strong shift of d p toward negative value (Fig. F.2.9) approximately proportional to H pp is observed. At the present no definite explanation is proposed. 

The intemal-vaiiables formulation is not the only way to define the internal energy. Following the seminal work of [122, 148] Boltzmann and Green and Rivlin and successively Coleman and Noll [124] proposed constitutive relations for which the stress a time t depends upon the entire history of deformation up to the current time instant. However, the definition of the internal energy was developed accordingly and in agreement with the fading memory properties, i.e., strains which occurred in the distant past have less influence on the present value of yr than those which occurred in the more recent past. 

It will be apparent that it is possible for a company to generate a negative EVA. In other words, the cost of capital employed is greater than the profit after tax, The impact of a negative EVA, particularly if sustained over a period of time, is to erode shareholder value. Equally improvements in EVA will lead to an enhancement of shareholder value. If the net present value of expected future EVAs were to be calculated this would generate a measure of wealth known as market value added (MVA), which is a true measure of what the business is worth to its shareholders, A simple definition of MVA is ... 

It must be stressed that the CMC value obtained from (4.6) is a function of the contribution factors Oi, 02, and /3j. In other words, the CMC depends on the solution properties employed in the determination and therefore differs with the method used. For this reason, measured CMC values define a narrow concentration range. The CMC values obtained from the solution properties mainly due to a monomeric surfactant contribution are found to be less than those due to a surfactant micelle contribution, as can be seen in Fig. 4.6. In this case, random errors are taken into account for the CMC determination methods. For example, the CMC value obtained from surface tension measurements is less than that obtained from turbidity. In the literature, however, CMCs have often been presented as definite concentra-tions, especially since the appearance of a separation model for micelliz-... 

Combining these definitions, one can obtain the fundamental net present value (NPV) equation that includes the tax effects ... 

The unit of heat used throughout this article is the calorie. Historically the calorie is defined as the specific heat of water. As soon as more accurate measurements were possible, it was found that the specific heat of water varies by as much as Va% between 0 and 100° C. For a more precise definition the temperature of the water had to be specified. Soon after 1900 practically all precision calorimetry was ultimately linked to the more convenient and accurate electrical measurement of oiergy. Out of habit most measurements were, however, still converted to calories, so that finally an artificial calorie was defined. The present value of this defined calorie is ... 

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