present value

present value
The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a present value factor. For example, if the opportunity cost ( opportunity costs) of funds is 10%, the present value of $100 to be received in one year is $100 x [1/(1 + 0.10)] = $91. Bloomberg Financial Dictionary
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The discounted value of future cash flows. Exchange Handbook Glossary
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The current value of a future cash flow discounted at an appropriate interest rate. LIFFE
See discount factor. LIFFE

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present value present value also present discounted value value1

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   The current value of a future cash flows, discounted at an appropriate interest rate. Cash earned in the future is worth less than cash earned immediately because today's cash can be invested and earn interest.

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present value UK US noun [C or U] (ABBREVIATION PV, also present discounted value)
ACCOUNTING the value today of an amount of money that you expect to receive in the future, considering the fact that a future payment is worth less than one received now: »

The gift, paid as an annuity, has a present value of $175 million.

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The value of a company's shares should equal the discounted present value of its future profits.

See also NET PRESENT VALUE(Cf. ↑net present value)

Financial and business terms. 2012.

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Look at other dictionaries:

  • Present value — is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. Present value calculations are widely used in business and economics to… …   Wikipedia

  • Present value — Pres ent value or Present worth Pres ent worth (of money payable at a future date). The principal which, drawing interest at a given rate, will amount to the given sum at the date on which this is to be paid; thus, interest being at 6%, the… …   The Collaborative International Dictionary of English

  • Present value — The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. The New York Times Financial Glossary * * * present value present value also present discounted value ➔ value1 * * *… …   Financial and business terms

  • Present Value - PV — The current worth of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.… …   Investment dictionary

  • present value — The value at the present time of future *cash flows. The *time value of money implies that units of *money are worth more at present than in the future, owing to the erosion of monetary value caused by inflation. Present values are thereby… …   Auditor's dictionary

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  • present value — noun also present worth : the principal of a sum of money payable at a future date that drawing interest at a given rate will amount to the given sum at the date on which this sum is to be paid at 65 interest the present value of $106 due one… …   Useful english dictionary

  • Present Value — Der Barwert (z. T. Gegenwartswert oder aus dem Englischen: present value) ist ein Begriff aus der Finanzmathematik . Der Barwert, ist der Wert, den zukünftige Zahlungen in der Gegenwart besitzen. Er wird durch Abzinsung der zukünftigen Zahlungen… …   Deutsch Wikipedia

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  • Present value of benefits — is a term used in cost benefit analysis and project appraisal that refers to the discounted sum, or Present value, of a stream of benefits associated with a project or proposal …   Wikipedia

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