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  • Glossary: Edition, New Delhi: Vikas Publishing

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    Neha Batra
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    NPV1 is a technique that explicitly recognizes the time value of money. It correctly postulates that cash flows arriving at different time periods differs in value and are comparable only when their equivalentspresent valuesare found out. IRR is the rate that equates the investment outlay with the present value of cash inflow received after one period. Payback is the number of years required to recover the original cash outlay invested in the project.

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    NPV1 is a technique that explicitly recognizes the time value of money. It correctly postulates that cash flows arriving at different time periods differs in value and are comparable only when their equivalentspresent valuesare found out. IRR is the rate that equates the investment outlay with the present value of cash inflow received after one period. Payback is the number of years required to recover the original cash outlay invested in the project.

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    7 views2 pages

    Glossary: Edition, New Delhi: Vikas Publishing

    Uploaded by

    Neha Batra
    NPV1 is a technique that explicitly recognizes the time value of money. It correctly postulates that cash flows arriving at different time periods differs in value and are comparable only when their equivalentspresent valuesare found out. IRR is the rate that equates the investment outlay with the present value of cash inflow received after one period. Payback is the number of years required to recover the original cash outlay invested in the project.

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    GLOSSARY

    1. Advance against Depreciation (AAD): AAD is used in order to balance the mismatch between tenure of loans and asset life. This concept is followed in case where the normal depreciation rates are not sufficient to meet the debt repayment obligation of a company.

    2. NPV1: It is a classical economic method of evaluating the investment proposals. It

    is a technique that explicitly recognizes the Time value of money. It correctly postulates that cash flows arriving at different time periods differs in value and are comparable only when their equivalents- present values- are found out.

    3. IRR: The internal rate of return (IRR) is the rate that equates the investment outlay with the present value of cash inflow received after one period. This implies that IRR is the discount rate which makes NPV= 0

    4. Payback: It is the number of years required to recover the original cash outlay invested in the project.

    IM PANDEY., 2008. Financial management, 9th edition, New Delhi: Vikas Publishing

    Pvt. Ltd

    5. Levelised Tariff: It is the tariff that is charged by the power company from the beneficiary. In simple words it is the cost of single unit of electricity

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