Probabilistic interpretation of the present value of cash flow
The question of assessing the current value of the flow of future earnings in the scientific literature worked out very carefully. A key factor in assessing a discounted rate, usually defined as the weighted average cost of capital invested. However, it is possible different perspective on the relat...
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| Format: | Article |
| Language: | English |
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Peoples’ Friendship University of Russia (RUDN University)
2011-06-01
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| Series: | RUDN Journal of Economics |
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| Online Access: | http://journals.rudn.ru/economics/article/view/11876 |
| _version_ | 1819131002296991744 |
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| author | I A Smarzhevsky |
| author_facet | I A Smarzhevsky |
| author_sort | I A Smarzhevsky |
| collection | DOAJ |
| description | The question of assessing the current value of the flow of future earnings in the scientific literature worked out very carefully. A key factor in assessing a discounted rate, usually defined as the weighted average cost of capital invested. However, it is possible different perspective on the relationship between the present value of money and its nominal amount, receipt of which is to be in the future. This paper proposes a new approach to the assessment procedure, the current value of the flow based on a probabilistic model in which the relation between the current and future nominal values defined as the confidence level in obtaining value in the future. Application of this model provides a natural way to introduce a quantitative measure of risk for the flow of future earnings. The paper analyzes the properties of the proposed measures of risk, shows its conformity with classical ideas of the relationship between risk and return investments, are examples of the calculation of absolute and relative indicators of the potential flow. |
| first_indexed | 2024-12-22T09:08:35Z |
| format | Article |
| id | doaj.art-3b1e3f1567e545b28c803a4a646d5638 |
| institution | Directory Open Access Journal |
| issn | 2313-2329 2408-8986 |
| language | English |
| last_indexed | 2024-12-22T09:08:35Z |
| publishDate | 2011-06-01 |
| publisher | Peoples’ Friendship University of Russia (RUDN University) |
| record_format | Article |
| series | RUDN Journal of Economics |
| spelling | doaj.art-3b1e3f1567e545b28c803a4a646d56382022-12-21T18:31:30ZengPeoples’ Friendship University of Russia (RUDN University)RUDN Journal of Economics2313-23292408-89862011-06-01029910711875Probabilistic interpretation of the present value of cash flowI A Smarzhevsky0Российский университет дружбы народовThe question of assessing the current value of the flow of future earnings in the scientific literature worked out very carefully. A key factor in assessing a discounted rate, usually defined as the weighted average cost of capital invested. However, it is possible different perspective on the relationship between the present value of money and its nominal amount, receipt of which is to be in the future. This paper proposes a new approach to the assessment procedure, the current value of the flow based on a probabilistic model in which the relation between the current and future nominal values defined as the confidence level in obtaining value in the future. Application of this model provides a natural way to introduce a quantitative measure of risk for the flow of future earnings. The paper analyzes the properties of the proposed measures of risk, shows its conformity with classical ideas of the relationship between risk and return investments, are examples of the calculation of absolute and relative indicators of the potential flow.http://journals.rudn.ru/economics/article/view/11876текущая стоимостьденежный потоквероятностьрискмерааннуитет |
| spellingShingle | I A Smarzhevsky Probabilistic interpretation of the present value of cash flow RUDN Journal of Economics текущая стоимость денежный поток вероятность риск мера аннуитет |
| title | Probabilistic interpretation of the present value of cash flow |
| title_full | Probabilistic interpretation of the present value of cash flow |
| title_fullStr | Probabilistic interpretation of the present value of cash flow |
| title_full_unstemmed | Probabilistic interpretation of the present value of cash flow |
| title_short | Probabilistic interpretation of the present value of cash flow |
| title_sort | probabilistic interpretation of the present value of cash flow |
| topic | текущая стоимость денежный поток вероятность риск мера аннуитет |
| url | http://journals.rudn.ru/economics/article/view/11876 |
| work_keys_str_mv | AT iasmarzhevsky probabilisticinterpretationofthepresentvalueofcashflow |