ohitusarvosta

Ohiitisarvo is a Finnish term that translates to "discount value" or "discounted value" in English. It refers to the present value of a future cash flow, taking into account the time value of money. In essence, money received in the future is worth less than the same amount of money received today due to the potential for earning interest or returns over time.

The concept of ohiitisarvo is fundamental in finance and economics. It is used in various applications, including investment appraisal, valuation of financial instruments, and cost-benefit analysis. The calculation of ohiitisarvo involves discounting future cash flows back to their present value using a discount rate. This discount rate represents the required rate of return or the opportunity cost of capital.

The formula for calculating the ohiitisarvo of a single future cash flow is: Present Value = Future Value / (1 + r)^n, where 'r' is the discount rate and 'n' is the number of periods until the cash flow is received. For a series of cash flows, the ohiitisarvo is the sum of the present values of each individual cash flow. A higher discount rate or a longer time period will result in a lower ohiitisarvo. This principle highlights the importance of considering the timing of cash flows when making financial decisions.