N
Nigel Lobo
Member
Hey Guys,
Could someone please explain to me what is the relation between net present value and interest rate ?? Because in Chp 8 Pg 11 ( Equations of Value), in the solved example it says that to get a lower present value we must try checking with a higher rate of interest implying an inverse relation whereas in Chp 10, Pg 7 ( Project Appraisal) , it says that net present value is directly related to interest rate i.e. higher the interest rate, higher the net present value. Could someone please tell me what's the difference between the two and if there isn't any, why are they showing two different ideas. Thank you.
Could someone please explain to me what is the relation between net present value and interest rate ?? Because in Chp 8 Pg 11 ( Equations of Value), in the solved example it says that to get a lower present value we must try checking with a higher rate of interest implying an inverse relation whereas in Chp 10, Pg 7 ( Project Appraisal) , it says that net present value is directly related to interest rate i.e. higher the interest rate, higher the net present value. Could someone please tell me what's the difference between the two and if there isn't any, why are they showing two different ideas. Thank you.