in which aggregate risk can be reduced by derivatives transactions between
net cash, as opposed to accounting net income, that a firm generates
during some specified period.
between our checkbook balance and the balance shown on the bank's books.
Present Value (NPV) 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
Present Value Profile
showing the relationship between a project's NPV and the firm's cost
assets minus current liabilities.
(Quoted) Risk-Free Rate, kRF
of interest on a security that is free of all risk: kRFis proxied by
the T-bill rate or the T-bond rate. kRF includes an inflation premium.
(Quoted, or Stated) Interest Rate
or quoted, or stated, interest rate.
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.
Profits/Rates of Return
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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