Present worth definition

The definitions of the terms encountered in discounted cash-flow calculations are taken from the literature.1 3 Discounted cash flow is concerned with the analysis of the value of money as a function of time. The money available at a future date has less value at the present and should be discounted by the interest to present worth (PW). P is the notation for the present sum of money, which should be used in such a manner that it produces a future income more than other forms of investment, irrespective of whether it is used for new equipment or the corrosion mitigation process. Let F be the amount of money available in the future when an investment of P is made. The relation between P and F may be written as ... 

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... 

An article by J. Linsley, Return on Investment Discounted and Undiscounted, Chern. Eng., 86(11) 201 (May 21, 1979), suggests that return on investment can be defined as net, after-tax profit plus depreciation divided by capital investment. This definition of return on investment where depreciation cash flow is included as part of the return is not used in this book, instead, this method of handling cash flow is included in the profitability methods reported for discounted-cash-flow Profitability Index and Net Present Worth. 

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. 

Income-tax effects can be included properly in all the profitability methods discussed in this chapter by using appropriate definitions of terms, such as those presented in Table 4. The methods of discounted-cash-flow rate of return and present worth are limited to consideration of cash income and cash outgo over the life of the project. Thus, depreciation, as a cost, does not enter directly into the calculations except as it may affect income taxes. 

Typically, firms have a limited amount of funds to invest in new projects. How do they decide which of several competing projects to finance These decisions are made via one or more measures of merit. The three most commonly used measures are (1) net present worth (NPW), (2) internal rate of return (IRR), and (3) equivalent uniform annual revenue (EUAR). Inextricably tied to each of these measures is the annual interest rate, i, or opportunity cost. A succinct definition of the opportunity cost is A dollar today is worth more than the prospect of a dollar tomorrow. ... 

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

Present worth of an annuity, 228 definition of 225-226 factors for, 223n., 236-237 method for determining depreciation, 285... 

If the future is known with certainty, then the least costly alternative may be selected by any of the methods presented in Chapter 91. For example, if it is known that outcome S3 wiU definitely occur, then should be selected because it wUl result in the lowest present worth (cost). On the other hand, if is selected and S4 perversely occurs, choosing wUl have resulted in the most costly event. 

One further point is worth mentioning at this time. The definition of a distribution function (3-5) involves the taking of a limit and, consequently, brings up the question of the existence of this limit. The limit will not, in general, exist for all possible time functions X(t), and the investigation of conditions for its existence is a legitimate mathematical problem. However, questions of this sort are quite beside the point in the present context. We are not really interested in knowing how to specify time functions in such a way that their distribution functions exist. Instead, we want to know how to specify a function Fx in such a way that it is the distribution function of... 

Despite its bad reputation as an analytical tool, XRF is potentially a traceable method according to the CCQM definition and could be a primary method although it was not selected as such, and won t be for a long time. In fact, it is the only microanalytical method which can at present be considered as a candidate for accurate microscopic elemental analysis. Proof of this statement follows from Monte Carlo calculations in which experimental XRF spectra can be accurately modelled starting from first principles [23], This is not an easy approach but with computing power now available it is feasible, though not worth the effort for bulk chemical analysis where other alternatives are available. 

The non linear dependence of Arp on HOMA results from the definitions of these parameters the first one is a quadratic function of the differences of bond lengths, whereas the other is a linear one. It is worth mentioning here that the main contribution to the variability of HOMA index for chelate chain comes out from the GEO term, i.e., it is due to changes in bond length alternation, whereas the contribution due to the bond elongation is chaotic and insignificant. Figure 7 presents the dependence of EN and GEO on Arp. 

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