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Meaning of present value

 

 

 

Present value

 

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Business glossary

 

Meaning of term present value :

 

The present value is used in investment appraisal to try to establish the value of future returns of income. Future incomes will be less valuable now and so they are discounted (using a discount rate) to give their current or present value. The present value is therefore the value today of future incomes from an investment.

 

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Meaning of term present value

 

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