Quires Related to Accounts

Dear Sir,

Please explain the below points

Cost of Capital
Present Value
Rate of Return

Appreciate your Help.
Replies (3)
Quick Summary
This discussion clarifies fundamental financial concepts including the Cost of Capital, Present Value (PV), and Rate of Return (ROR). It explains that the Cost of Capital is the minimum profit a company needs to generate value, while Present Value represents the current worth of future money. The Rate of Return measures an investment's profit or loss over time as a percentage of its initial cost.

Cost of capital may be considered as finance / interest costs towards borrowed capital
Cost of capital is the minimum rate of return or profit a company must earn before generating value.

Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Present value takes the future value and applies a discount rate or the interest rate that could be earned if invested.

Rate of return (ROR) is the loss or gain of an investment over a certain period, expressed as a percentage of the initial cost of the investment.
Cost of capital is the cost incurred for maintaining the capital . There are two ways of maintaining cost of capital ...Weighted average cost of capital and cut off rate . Cost of debt , cost of equity which are being calculated on the basis of certain assumptions.
PRESENT VALUE OF MONEY IS FV/(1+R)^n
Today you hv invested some amount of money
what will be the value of same amount of money after 5 years.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
14 August 2026
Semi Qualified

Goyanka & Associates

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 26 August 2026
CA Article Assistant/CA Drop Out/Accounts Executive

PARV & Co.

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 10 August 2026
Article Assistant

Suraj Garg and Associates

New Delhi

CA Inter

View Details
Company
28 August 2026
Assistant Manager

NRS AND ASSOCIATES

Kozhikode

CA Inter

View Details
Company
ARTICLESHIP 17 August 2026
Article Assistant

K R Kiran Kumar & Associates

Bengaluru

CA Inter

View Details
Company
12 August 2026
Deputy Manager - Finance

RoamPrime Technologies Private Limited

Bengaluru

CA

View Details
Company
13 August 2026
Chartered Accountant (FP&A)

Client of Trellis Consulting

Gurgaon

CA

View Details
Company
18 August 2026
CA Semi Qualifies

Goyanka and Associates

New Delhi

CA Inter

View Details