Net Present Value and Internal Rate of Return

Accounting for Time

Key Topics Covered in This Chapter

Present and future value

Net present value

Internal rate of return

Hurdle rate and discount rate


THIS CHAPTER will introduce you to financial decision-making tools that account for time value: specifically, present and future value, net present value, and internal rate of return. These are among the most powerful and useful decision tools available to managers. Whether you’re considering the development of a new product, the purchase of a new asset, or any other type of investment, these time-value tools can greatly enhance your decisions. ...

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