New answers tagged risk
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Why does NPV correspond to "cash in our pockets now" for risky investments?
The NPV for a risky project reflects investors' willingness to take the risk. Taking the risk means that the investors are prepared to give you cash today in exchange for (a share of) the future ...
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Why does NPV correspond to "cash in our pockets now" for risky investments?
The answer is right in your question:
"Because the cash flows are not guaranteed, how can we similarly get the magnitude of the NPV as cash into our pocket right now?"
"For such risky ...
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