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The change in value of a cash flow due to time applied at a given interest rate. Most investment formulas use this.

2
votes
1answer
148 views
+50

Warren Buffet's calculation of the value of the company - very low discounting rate

I was read the book "The Buffett Way". The book claims that Warren Buffett uses a simple calculation to calculate the intrinsic value of a company. The regular way is to estimate future earnings &...
0
votes
0answers
26 views

Fixed amount discount when invoice has multiple line items and multiple tax rates? [closed]

How do I work out the tax for an invoice, when a set amount discount needs to be applied to invoice that has multiple line items with multiple tax rates? See my example invoice below: SomeItemOne(...
4
votes
1answer
598 views

How to deal with discount when invoice has multiple line items and multiple tax rates?

I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below: SomeItemOne(Tax: 20%...
1
vote
2answers
52 views

Calculate order discount correctly when Tax is set per unit?

I'm sure this has been asked before, but I could not find an answer when I searched. Lets say I have an invoice with 3 line items shown below (All excluding tax) SomeItemOne - Cost:£2.45 | Qty:1 ...
0
votes
1answer
23 views

How to consider capital assets in DCF analysis?

I'm calculating an enterprise value with the DCF analysis. In DCF I consider revenues - costs, and I also discount reinvestments. These reinvestments are to get more capital. How can I take into ...
0
votes
1answer
19 views

DCF Terminal Value Discounted Twice?

Im looking at an example of calculating intrinsic value using DCF model. https://www.investopedia.com/university/dcf/dcf4.asp Here he calculates the terminal value as Then in his final calculation ...
1
vote
1answer
77 views

Calculating NPV for future cash inflows [closed]

I have a question, where I am calculating the net present value of a project we are considering if it is beneficial or not. The project starts and the sales (cash inflows), don't start until a few ...
0
votes
0answers
43 views

How can I calculate the spot rate for a given time period, given the discount rate for that same period?

I have a time period of .353 years, for which I have found a discount rate of .926142. How can I use this information, and only this information, to find the spot rate? Similarly, for a time period of ...
2
votes
1answer
98 views

When does it make sense to buy an annual rather than a monthly pack?

My TV provider offers me a monthly package, but lets me prepay for a longer duration at lower price. Here are the options: ₹100 monthly ₹567 semi-annually ₹1,098 per annum ₹2,100 biennial All these ...
3
votes
3answers
164 views

Given a certain yearly savings, how much can I spend on a capital improvement? NPV of future cash flow

I'm seeking a simple online calculator, or explicit instructions for a spreadsheet, for answering simple real-world scenarios like this: Our insurance company is offering a 30% discount on an $8200/...
4
votes
3answers
1k views

How can I calculate yearly interest of my investment gain?

I'm trying to figure out the yearly interest of a potential investment. Lets say I invested $10 000, 13 days later i cash out and I now have $10 500. The interest here is 4,76% for 13 days. But can I ...
-1
votes
0answers
150 views

Why initial mortgage payments go towards the interest and not principal? [duplicate]

What is the reason that initial monthly payments towards a mortgage mostly goes to the interest and then later on, the payment goes to the principal? Is it designed this way for the benefit of the ...
34
votes
7answers
73k views

Why do banks want you to pay off interest before principal?

When you take out a traditional mortgage the first payment you make to a bank pays off mostly interest and then later payments start paying off principal. What is the reason for this? Is it just a ...
10
votes
6answers
5k views

Why making additional payment to mortgage counts towards principal? Why does it matter?

When it comes to mortgage advice, some people recommend making an extra payment. The logic is :"These extra payments are automatically applied to your principal, not interest". Why does it matter if ...