A simple, intuitive introduction to rule-difficult issues of discounting and present value. While the mechanics of the calculation of net present value and internal rate of return are well covered, the focus is more on how you think about these concepts (for example, the earlier-the-better on the receipt of cash flows). Using concrete examples, it promotes an understanding of how the different considerations affecting present value (for example, when the discount rate increases, the impact of cash flows furt … Read More »

A simple, intuitive introduction to rule-difficult issues of discounting and present value. While the mechanics of the calculation of net present value and internal rate of return are well covered, the focus is more on how you think about these concepts (for example, the earlier-the-better on the receipt of cash flows). Using concrete examples, it promotes an understanding of how the different considerations affecting present value (for example, when the discount rate increases, the impact of cash flows continued to rise during the period reduced).
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John S. Hammond
10 pages.
Release date: 01 August, 1972. Prod #: 173003-PDF-ENG
Introduction to Accumulated cash value and internal rate of return HBR case solution