The method of calculating the net present value of a project by adding the present discounted value of all expected net cash flows at various future dates. If the expected net receipts at time N are R_N, and the rate of interest is 100r per cent, the present discounted value of net receipts at time N is R_N /(1 + r)^N, and the discounted cash flow is the sum of these into the future, denoted by 0198607679.discounted-cash-flow.1.jpg A project may have an indefinite life, or it may be expected that for N > N^*, R_N = 0. Some of the R_N may be negative; this will be the case if construction takes time and there is a running-in period before a new project is expected to make profits. There may also be closing-down costs at the end of a project.

• leveraged buy-out
• levy, capital
• levy, import
• liabilities
• liability
• liberalization
• liberal trade policy
• LIBOR
• licence, import
• licensing
• life assurance
• Life Assurance and Unit Trust Regulatory Organization
• life cycle
• life insurance
• LIFFE
• LIFO
• limit
• limit, cash
• limited company
• limited liability
• limit pricing
• linear approximation
• linear equation
• linear function
• linear programming