present value (PV)
Definition
Estimated current value of a future amount to be received or paid out, discounted (see discounting) at an appropriate rate, usually at the cost of capital rate (the current market interest rate). PV provides a common basis for comparing investment alternatives. Also called present worth. See also net present value, discounted cash flow, and future value.
present value (PV) is in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.
present value (PV) appears in the definitions of the following terms:
weighted average cost of capital,
value recovery provision,
Macaulay duration,
profitability index,
cost-benefit ratio,
residual value,
actuarial cost method,
discounted cash flow method,
discount rate,
capitalization rate
and
present value (PV) appears in the other terms: present value (PV) factors, present value (PV) of a future amount
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