Net Present Value

Net present value is a financial formula that refers to a value of cash flows from the future discounted at a set rate. The cash flows can be equal over time or have varying amounts. The key is that the cash received in earlier years has more value than cash well out into the future.

Discounts – Various Meanings in Business

Discounts

The term ‘discounts’ is a broad and varied meaning word when it comes to use in business. It literally has four distinct definitions. Each definition is used within a certain context of business. The first and most dollar expensive use is with original issue discount related to bonds in the market. The second use and most common is as an incentive in business.

Internal Rate of Return (IRR)

Internal Rate of Return (IRR)

Internal Rate of Return or IRR is the value rate earned on investment made by the company with its working capital. In the small business world, this form of financial investment evaluation has little to no value. Allow me to restate this: ‘IRR has limited to NO value in the small business world’.