Present Value

Business / Taxes / Present Value: The present value of a future payment, or the time value of money, is what money is worth now in relation to what you think it'll be worth in the future based on expected earnings. For example, if you have a 10% return, $1,000 is the present value of the $1,100 you expect to have a year from now. The concept of present value is useful in calculating how much you need to invest now in order to meet a certain future goal, such as buying a home or paying college tuition. Many financial websites and personal investment handbooks provide calculators and other tools to help you compute these amounts based on different rates of return. Inflation has the opposite effect on the present value of money, accounting for loss of value rather than increase in value. For example, in an economy with 5% annual inflation, $100 is the present value of $95 next year. Present value also refers to the current value of a securities portfolio. If you compare the present value to the acquisition cost of the portfolio, you can determine its profit or loss. Further, you can add the present value of each projected interest payment of a fixed income security with one year or more duration to calculate the security’s worth.

Other Words for Present

Present Noun Synonyms: current, contemporary, present-day, existing, existent, up to date, now
Present Verb Synonyms: give (out), award, confer (on), bestow (on), turn or hand over, grant, provide, furnish, dispense, distribute, dole out, pass out, deal out, mete out

Net Present Value Of Future Investments

Business / Finance / Net Present Value Of Future Investments: The present value of the total sum of NPVs expected to result from all of the firm's future investments. MORE

Net Present Value Of Growth Opportunities

Business / Finance / Net Present Value Of Growth Opportunities: A model valuing a firm in which net present value of new investment opportunities is explicitly examined. MORE

Net Present Value (NPV)

Business / Finance / Net Present Value (NPV): The present value of the expected future cash flows minus the cost. MORE