Examlex
The wealth effect is also known as:
Net Present Value Rule
A principle that states an investment should be made if the net present value of its cash flows, discounted at the hurdle rate, is positive.
Invest
The act of allocating resources, usually money, with the expectation of generating an income or profit.
Cost of Capital
The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.
Present Value
The current value of a future sum of money or stream of cash flows given a specified rate of return.
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