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Tags: finance
Categories: Economics & Finance
Today’s value for income to be received in the future.
Two factors affect the analysis:
- the perceived risk that one might receive nothing at all in the future, or a smaller amount than expected.
- the potential income from alternative investments that could be purchased if one were paid the present value for a future income stream (discounting is the mathematical calculation used to arrive at present value).
(source: thefreedictionary.com )
Synonyms:
net present value - npv
