Which of the following is not needed to calculate the net present value of an investment?

By Investopedia AAA
A:

A. The amount of interest expected to be generated each year
B. The time horizon – how long the investment is expected to be held in the portfolio



C. The interest rate to be used for discounting the annual payments to be received



D. The amount needed at the end of the holding period




Answer: D



to calculate net present value, the discount rate, cash flows and time horizon are all required. The amount desired at the end of the period is not part of the equation.



RELATED FAQS

  1. What is the average salary for an accountant?

    Learn about the average salaries of various accounting positions, and see the difference that an accounting degree makes ...
  2. Is the Bureau of Labor Statistics accurate?

    Read this brief analysis of the accuracy of Bureau of Labor Statistics, including a summary of the types of reports issued ...
  3. Where is cost of living lowest in the world?

    Learn how the cost of living is the lowest in India based on numbers derived from the CPI and organizations like Expatistan ...
  4. How does the Bureau of Labor Statistics define contingent workers?

    Discover how contingent workers are a significant part of the labor force and are defined as persons who do not expect their ...
RELATED TERMS
  1. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
  2. Mean-Variance Analysis

    The process of weighing risk against expected return. Mean variance ...
  3. Systematic Sampling

    A type of probability sampling method in which sample members ...
  4. Variance

    The spread between numbers in a data set, measuring Variance ...
  5. Leptokurtic

    A statistical distribution where the points along the X-axis ...
  6. Platykurtic

    A type of statistical distribution where the points along the ...

You May Also Like

Related Articles
  1. Fundamental Analysis

    Lognormal and Normal Distribution

  2. Investing Basics

    Using Normal Distribution Formula To ...

  3. Technical Indicators

    The Normal Distribution Table, Explained

  4. Economics

    Can Investors Trust Official Statistics?

  5. Active Trading Fundamentals

    Hypothesis Testing in Finance: Concept ...

Trading Center