With that result in hand, we are able to ask how the conditional variance of the discounted present value
of expected observed fundamentals compares with the conditional variance of the exchange rate.
These requirements insure that, analogous to interest-bearing debt discounted at its coupon rate, the discounted present value
of deferred taxes will always be equal to their absolute amount.
Low and stable bond rates have been good for equities prices, which are fundamentally based on the discounted present value
of future earnings.
The cost of non-healthcare-related termination benefits for which the benefit terms establish an obligation to pay specific amounts on fixed or determinable dates should be measured at the discounted present value
of expected future benefit payments (including an assumption regarding changes in future cost levels during the periods covered by the employer's commitment to provide the benefits).
Second and more importantly, the monopolistically competitive firm bases its decision to change price on a comparison of the menu costs either with the change in single-period profit, or with the discounted present value
of the changes in all future profits, depending upon whether it perceives the aggregate demand shock to be temporary or permanent.
PVHt = Discounted present value
of optimal harvest at time t
Accordingly, the decision to migrate from area i to area j requires that the net discounted present value
of the move from area i to area j, DPVij, be both (a) positive and (b) the maximum net discounted present value
that can be expected by moving out of area i into any other known alternative.
A company's value is based on its current earnings plus the discounted present value
of its future earnings.
(3) However, as the number of years that cash flows are received increases, the discounted present value
of the cash flows converges to what one would obtain using equation (2).
This amount is basically the difference between the discounted present value
of benefits and the discounted present value
of costs-or the value today of an amount to be received later, discounted at a rate of 15 percent.
"Not if a studio spends $2 billion to produce a library with a discounted present value
of $1 billion," he declared.
The discounted present value
following the increase in rental values is