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What Is Rationality and Why Is It So Influential as a Concept

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What is rationality and why is it so influential as a concept?


Definitions:

Present Value

The today's worth of a future sum or cash flows series, based on a predetermined rate of return.

Cash Inflows

Refers to the money coming into a company, typically from operations, investments, and financing activities.

NPV Zero

A situation where the net present value of a project or investment is zero, indicating that the projected earnings are exactly equal to the initial investment.

Required Return

The minimum expected return an investor demands for investing in a non-risk-free asset.

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