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    lee1103's Avatar
    lee1103 Posts: 1, Reputation: 1
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    #1

    Nov 4, 2007, 02:19 AM
    What is the meaning of "discounted value of expected net receipts?
    What is the meaning of "discounted value of expected net receipts?
    brainworm's Avatar
    brainworm Posts: 1, Reputation: 1
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    #2

    Apr 29, 2009, 08:20 PM

    discounted value of expected net receipts
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    morgaine300 Posts: 6,561, Reputation: 276
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    #3

    Apr 30, 2009, 12:25 AM

    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.

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