STUDY FOR BUSINESS

Advantages and Disadvantages of B2B

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Advantages and disadvantages of B2C

2020-07-10T12:48:00.001-07:00

Advantages and Disadvantages of Telemarketing

2020-07-10T12:46:00.001-07:00

What is Poverty? Causes of peverty, Poverty in Pakistan, and Causes of povert in Pakistan

2020-07-10T12:41:00.000-07:00

Simple Example of Inventory Valuation

2018-01-28T10:38:00.000-08:00

Inventory Valuation

Present Value

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Present Value:

Present value is the current value of an amount in the future. If we talk about economics, present value, is referred to as present discounted value and in finance it is called cash flow, is a future amount of money that is discounted to reproduce its present value, as if it lived today. The present discount value is always fewer than or equivalent to the future value since money has interest-earning potential, a feature refers to as the time value of money.

The present value of a future amount of money or present discounted value or cash flow is given as particular rate of return. Future present values are discounted at the interest rate, and the superior the interest rate, the inferior the present value of the future cash flows. Finding the suitable discount rate is the core to appropriately valuing future cash flows, whether they be earning or duty.

Present Value also referred to as "discounted value"

The formula for calculating the present value or cash flow is:

PV = CF/(1+r)ⁿ

CF = PV(1+r)ⁿ

Where CF is the future value of money that is discounted, and n is the number of periods in which the current date and the date where the amount is charge, i is the discounted rate for a time period (when the interest is applied considered as the time period, for example, annually, quarterly, monthly, weekly, daily). The interest rate i, is provided as a percentage, but explicit as a decimal value in this formula.

Explanation:

Some time we quite embarrassed, but it is simple like abc. Assume that you received $2000 now is worth but it will have more than $2000 after ten years, because if you get the money now, you can invest it and obtain an extra amount of money over the ten years.

For example, let’s assume that, if the present value of $1000 is used or got and the interest rate is 10 percent, then one year from now is $1000 divided by 1.10, which is about $909.

What is Current Ratio?

2014-08-13T11:59:00.000-07:00

Shareholders Equity and its Components

2014-08-11T23:18:00.000-07:00

Understand Organizational Behavior

2013-07-11T13:43:00.002-07:00

Best way to calculate company's overall weighted average cost of capital

2013-07-10T13:18:00.002-07:00

Compensating Balance and its benefits

2013-07-10T13:12:00.001-07:00

Market Risk Premium - Definition, Formula and Calculation

2013-05-14T14:32:00.001-07:00

Loyal Employees are Assets not Liabilities - Human Resource Management

2013-05-09T14:39:00.001-07:00

Cost of Debt, Formula, Calculation, and its Benefits

2012-11-06T14:36:00.004-08:00

What is Temporary Assets? temporary assets

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A subset of a company's current assets that changes according to seasonal fluctuations.

For example, a retail store's current inventory may include holiday decorations around Christmas. These decorations would be temporary assets with respect to the remainder of the store's inventory.

Permanent Current Assets

2012-11-06T07:23:00.002-08:00

The minimum level of current assets that a firm needs to continue operation. Because some level is always maintained, they are called permanent current assets.

OR

The current assets a firm needs in order to continue operations. Examples include inventory and perhaps rapidly depreciating assets such as computers. These assets are current because they do not remain assets for longer than a year, but they are permanent because they must be replaced with similar assets. Despite the seeming contradiction in the name, they are called permanent current assets because every company must permanently maintain a certain amount in current assets in order to exist.

Cost of Retained Earnings, Its Method and Calculation

2012-11-05T14:29:00.003-08:00

Cost of Preferred Stock - Detail Definition | Formula | Calculation | Example

2012-11-05T14:23:00.003-08:00

Cost of Capital - Simple Definition | Capital Structure | Factors Affecting Cost of Capital

2012-11-05T14:18:00.002-08:00

Expected Rate of Return - Simple Definition, How to Calculate, Benefits and Perception of Financial Professionals

2012-11-03T14:40:00.002-07:00

Discount Rate Definition - Practical Example of Discount Rate and Discount Rate Formula

2012-11-03T14:19:00.002-07:00

What is Uneven Cash Flow Stream?

2012-11-03T14:12:00.001-07:00

Future Value Definition - FV

2012-10-30T15:12:00.000-07:00

Fixed Asset Turnover Ratio

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Profitability Ratios

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