Web www.software-risk.co.uk

The net present value analysis of an asset if financed solely by equity (present value of unlevered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leveraged buyout.

Copyright © 2005, Campbell R. Harvey. All Worldwide Rights Reserved. Do not reproduce without explicit permission.

Related Articles
Present value
NPV profile
Infrastructure risk
Extraordinary positive value
Expected future cash flows
Equivalent annual cash flow
Equivalent annual benefit
Equivalent annual annuity

Similar Areas

Finance Items

Selected Books

Keywords

Adjusted present value (APV)

APV

net present value

asset

cash flows

present value

levered cash flows

tax shields

deductibility of interest