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What does it take to determine the present value of an investment?

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What does it take to determine the present value of an investment? How would you project the future cash flows? How do you determine what discount, or interest, rate to use? Think about today's economy. How would you use the current information to determine the value of an investment? Would it be higher or lower than it was a year ago? Why?

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Solution Summary

This provides an idea of the data needed to figure NPV. This solution is concise, 81 words, but provides needed theory. ALERT: This does not use any of the information in the Guillermo Furniture case, nor offer any computations, it is a theory discussion about what information you would need to "go find" in order to complete these computations.

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The scenario was not attached so here is a generic response:

What does it take to determine the present value of an investment?

The cash flow streams and a discount rate.

Using the information in the Guillermo Furniture Scenario, how would you ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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