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Gold/Mining/Energy : Winspear Resources
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To: ddl who wrote (26184)7/12/2000 8:20:51 PM
From: maintenance   of 26850
 
NPV represents the value above fair. An NPV of zero represents a fair price. Example.

You pay $100 for a bond that will give you 10% interest
plus return your principle at the end of one year.

So the cash flows are
Nominal Discounted
Pay for bond now -100 -100

Receive int+ prin +110 +100
at end of year ------

NPV 0

An informed person should be indiferent to such a
transaction since there is no added value to buying
the bond. It is fair.
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