Search results
Results from the WOW.Com Content Network
The discounted payback period (DPB) is the amount of time that it takes (in years) for the initial cost of a project to equal to the discounted value of expected cash flows, or the time it takes to break even from an investment. [ 1 ] It is the period in which the cumulative net present value of a project equals zero.
Payback period. Payback period in capital budgeting refers to the time required to recoup the funds expended in an investment, or to reach the break-even point. [1] For example, a $1000 investment made at the start of year 1 which returned $500 at the end of year 1 and year 2 respectively would have a two-year payback period.
Discounted cash flow. The discounted cash flow (DCF) analysis, in financial analysis, is a method used to value a security, project, company, or asset, that incorporates the time value of money. Discounted cash flow analysis is widely used in investment finance, real estate development, corporate financial management, and patent valuation.
Strategy. Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three/four generic strategies, either lower cost, differentiated, or focus. A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating ...
The net present value (NPV) or net present worth (NPW) [1] is a way of measuring the value of an asset that has cashflow by adding up the present value of all the future cash flows that asset will generate. The present value of a cash flow depends on the interval of time between now and the cash flow because of the Time value of money (which ...
The alternate strategies are to purchase a fixed number of shares each time period, or to save up the funds that are available for investment and attempt to purchase shares at times when the market is low, i.e. market timing. A major advantage for the investor using DCA is not having to make a decision on a day to day basis about the best time ...
Investment strategy. In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Individuals have different profit objectives, and their individual skills make different tactics and strategies appropriate. [1] Some choices involve a tradeoff between risk ...
Internal rate of return (IRR) is a method of calculating an investment's rate of return. The term internal refers to the fact that the calculation excludes external factors, such as the risk-free rate, inflation, the cost of capital, or financial risk. The method may be applied either ex-post or ex-ante. Applied ex-ante, the IRR is an estimate ...