Naval Net Present Value: What Future Income Is Worth Today
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Jul 29, 2019 Dive into the intriguing world of Net Present Value and discover how to evaluate future income streams. The discussion highlights the importance of discount rates when considering investment risks, using stock options from startups as a prime example. Learn the art of calculating what tomorrow's earnings are worth today, and why this knowledge is crucial for smart financial decisions. Get ready to rethink how you perceive future income!
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Net Present Value (NPV)
- Discount future income streams to determine their present value.
- Use a discount rate reflecting the inherent risks, like those faced by startups.
Startup Stock Options
- A startup founder might overvalue stock options by projecting future worth.
- Consider the current valuation and recent funding rounds for a realistic assessment.