WOLFRAM|DEMONSTRATIONS PROJECT

Entrepreneurial Calculation and the Interest Rate

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future rate estimation error
0
future cash flow estimation error
0
investment A
long term
investment B
long term
This Demonstration shows the net present value (NPV) of two investments valued at different interest rates. To calculate the NPV an entrepreneur must estimate future rates of interest and the size of future cash flows. Explore the range of real returns for each investment in the case that the entrepreneur has made errors in estimating these parameters. Chose between long-term, short-term, or annuity style investments.