EBK FUNDAMENTALS OF CORPORATE FINANCE
EBK FUNDAMENTALS OF CORPORATE FINANCE
4th Edition
ISBN: 8220103631754
Author: Harford
Publisher: PEARSON
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Chapter 8, Problem 18P
Summary Introduction

Net Present Value: Net present value refers the variance between present value of cash flows and present value of cash outflows.

Cash flow: Inflow and outflow movement of cash is known as Cash flows. Cash flows are the expected cash to be generated by an asset, investment or business. There are two types of cash flows, namely cash inflow and cash outflow. The payments refer to cash outflows and receipts refer to cash inflows.

Internal Rate of return: Internal rate of return is that rate at which the present value of cash inflows is similar to present value of cash outflows and resulted net present value became zero.

To Explain: The advice is given by the EBK FUNDAMENTALS OF CORPORATE FINANCE, Chapter 8, Problem 18P , additional homework tip  1 rule and the EBK FUNDAMENTALS OF CORPORATE FINANCE, Chapter 8, Problem 18P , additional homework tip  2 rule.

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