Examlex
Solving for Rates What annual rate of return is implied on a $700 loan taken next year when $800 must be repaid in year 3?
Net Present Value
The difference between the present value of an investment project’s cash inflows and the present value of its cash outflows.
Discount Rate
The interest rate used to discount future cash flows to present value, often reflecting the cost of capital or risk level.
Payback Method
A method of investment appraisal that calculates the time required for the cash inflows from a project to repay its initial investment.
Cash Flows
The total amount of money being transferred into and out of a business, affecting the company's liquidity.
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