Natural
Hedges
Situations
in which aggregate risk can be reduced by derivatives transactions between
two parties.
Net
Cash Flow
The actual
net cash, as opposed to accounting net income, that a firm generates
during some specified period.
Net
Float
The difference
between our checkbook balance and the balance shown on the bank's books.
Net
Present Value (NPV) Method
A method
of ranking investment proposals using the NPV, which is equal to the
present value of future net cash flows, discounted at the marginal cost
of capital.
Net
Present Value Profile
A graph
showing the relationship between a project's NPV and the firm's cost
of capital.
Net
Working Capital
Current
assets minus current liabilities.
Nominal
(Quoted) RiskFree Rate, kRF
The rate
of interest on a security that is free of all risk: kRFis proxied by
the Tbill rate or the Tbond rate. kRF includes an inflation premium.
Nominal
(Quoted, or Stated) Interest Rate
The contracted,
or quoted, or stated, interest rate.
Normal
(Constant) Growth
Growth
which is expected to continue into the foreseeable future at about the
same rate as that of the economy as a whole; g is a constant.
Normal
Profits/Rates of Return
Those
profits and rates of return that are close to the average for all firms
and are just sufficient to attract capital
.
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