[lee1103]

What is the meaning of "discounted value of expected net receipts?

[brainworm]

discounted value of expected net receipts

[morgaine300]

The discounted value is essentially the present value of the future cash flows. It can be applied to different things.

As a simple example, let's say you sell something and are expecting payments of $3000 each at the end of the next four years. You have a series of payments, for four periods, at $3000 each. Let's also say there is an assumed interest on this of 5%.

You would figure out the present value of an annuity using those above numbers. That's the "discounted amount." The four $3000 payments will add up to $12,000 in total. But the present value of that is $10,640 (rounded). The difference between those two would be your assumed interest.

A "net receipt" is the difference between any receipts and any payouts. If you could receive $3000 a year, but also had to pay out $500 a year for something related to this, then the net would be $2500. So you'd do the present value of $2500.

There's lots of different applications of this, and different terms can be used.