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New Approach to NPV

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Sandip De
Sandip De

Time Varying NPV

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Capital Budgeting Decision Rules ,[object Object]
Different Capital Budgeting Decision Rules ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Net Present Value (NPV) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Properties of NPV Rule ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Discount rate Change with Time ,[object Object],[object Object],[object Object],[object Object]
NPV using Time Varying Discount Rates Where, C t = Cash flow at the end of each period r j = One period discount rate applicable to period j (r 0 = 0) n = Life of the project α t = Certainty of Cash flow in percentage Risk Less Approach Certainty Equivalent Approach
NPV using Time Varying Discount Rates ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
NPV using Time Varying Discount Rates ,[object Object],[object Object]
Limitations of NPV ,[object Object],[object Object],[object Object],[object Object]

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New Approach to NPV

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  • 6. NPV using Time Varying Discount Rates Where, C t = Cash flow at the end of each period r j = One period discount rate applicable to period j (r 0 = 0) n = Life of the project α t = Certainty of Cash flow in percentage Risk Less Approach Certainty Equivalent Approach
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