Why future value is important to calculate?

Q: Why study financing?

A: Borrowing, the usage of cash balances, and various other operations are used to fund a deficit or a…

Q: What is an econymic in development?

A: Economic Development is the growth of a country’s economy. It is the growth in the standards of…

Q: what is risk and return in the context of financial decision making?

A: Risk and return are two very important concept used in any financial decision making. Two financial…

Q: Which is better from the investor's perspective

A: The Answer

Q: Discuss Present Value of Perpetuities?

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

Q: What are the sources of risk associated with project development?

A: Variations in returns of an investment from its expected returns are called risk. The risk of an…

Q: How does the Broader Diversification Reduce Risk?

A: Portfolio is a pool of different investments/assets. Investors can categorize the risks in two…

Q: What is forecast horizon?

A: Forecasting refers to the process where estimation about the future events is determined in advance…

Q: What are the risks of investing in an ESOP?

A: ESOP stands for Employee Stock Ownership Plan. It is a plan that gives an ownership interest in the…

Q: Are the financial projections realistic and healthy?

A: Estimating things before the real cost and revenue incurred is known as financial estimation.…

Q: How would the risk premium work out for a riskier investment?

A: A risk premium is a return on venture over the hazard free rate a financial specialist requires to…

Q: What is the horizon value? Why is it also called the terminal valueor continuing value?

A: Horizon value is the value of the expected dividend that will be received after the horizon date.

Q: What outcomes are possible with speculative risk?​

A: Speculative risk is a form of risk in which the outcome is unknown and there is a chance of both…

Q: What are some possible financial decisions in which using the Present Value (PV) formula might be…

A: The present value (PV) is the current value provided a defined rate of return of a future amount of…

Q: What is the causes of the financial risk?

A: financial risk - financial risk is the possible danger of losing money from an investment made by…

Q: Explain why risk adjustments are important and how they can affect firm value.

A: Risk adjustments are a critical component of financial analysis and investment decision-making,…

Q: What is financial risk, and how does it arise?

A: Answer: Usually, financial risk refers to a situation where a company is not able to pay its fixed…

Q: What is the y risk-free investment?

A: Risk-free rate of return is the rate of return that an investor expects from an investment in any…

Q: What is the concept of future value within the context of the larger overall concept of the time…

A: The concept of future value is a fundamental component of the broader idea known as the time value…

Q: What is the math behind the net present value calculation?

A: Net present value is based on capital budgeting technique. Net present value is used to measure the…

Q: Explain Financial Engineering?

A: Introduction: Financial engineering is nothing but application of quantitative methods in financial…

Q: Give an example of the Present Value of Perpetuities?

A: Perpetuity is a continuous annuity, a progression of equivalent interminable cash flows happening…

Q: What is future value, FV?

A: Future Value: The future value is the value of the present amount compounded at an interest rate…

Q: Describe the methods of determining the Project Risk?

A: Project risk is an uncertain event or circumstance that affects at any rate one objective of a task,…

Q: How can we make the equivalence calculations of future worth?

A: Future value is the value of the current or the present amount at future specified time for the…

Q: Explain the problem of a capital-investment?

A: For the financing of capital investment, generally, the company considers operating cash flow of its…

Q: How do you evaluate an asset whose value is dependent on future cash flow expectations

A: The Answer :

Q: compare Future Value and Present Value?

A: The comparison between present value and future value is as follows:

Q: Why does riskiness increase with time?

A: Risk can be said as that difference that arises which arises on expected outcome or investment's…

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: What are some possible financial decisions in which using the Future Value (FV) formula might be…

A: The concept of time value of money states that the money received today is worth more than that the…

Q: What is money market?

A: Introduction: Money market is a market for short period funds or financial assets. It deals with…

Q: When considering several possible investments, why are rates of return preferable than monetary…

A: The return, often called a financial return, is the sum of money wasted or earned on an investment…