What is the difference between annuity cost and annuity net flow?

Annuity cost = total present value of cash outflow annuity present value factor.

Annuity Net Flow = Net Present Value Annuity Present Value Coefficient.

Both are based on the present value of the annuity, and the name of the annuity is different because the present value used is different.

3.In the calculation of annuity cost, the outflow is added, and the inflow is subtracted;

In the calculation of the net flow of annuities, the inflow is increased, and the outflow is decreased.

Annuity cost = total present value of cash outflow annuity present value factor.

Annuity Net Flow = Net Present Value Annuity Present Value Coefficient.

Both of them calculate annuities based on the present value, and because the present value of the sedan branch used is different, the name of the annuity is different.

3.In the calculation of annuity cost, the outflow is added, and the inflow is subtracted;

In the calculation of the net flow of annuities, the inflow is increased, and the outflow is decreased.

Not the same thing, the concept is not exactly the same. Net cash flow.

Refers to cash and cash equivalents for a certain period of time.

the balance of inflows (income) minus outflows (expenses) (net income or net expenses);

The net annuity flow refers to the decision-making scheme that selects the optimal plan according to the size of the annual equivalent net ** of all investment plans;

Operating cash flow.

Refers to an investment project.

After it is completed and put into use, due to production and operation during its life cycle.

The amount of cash inflows and outflows that are generated. Shoot down.

Net cash flow can be calculated using the following formula: Net cash flow.

Cash inflows - cash outflows.

The net annuity flow can be calculated using the following formula: annuity net flow = net present value annuity present value coefficient.

Annual net operating cash flow can be calculated using the following formula: annual net operating cash flow = annual operating income.

Pay the cost of income tax.

Net annuity flow refers to the average net cash flow of the total present value or total terminal value of all total cash flows during the project period converted into an equivalent annuity. The formula for calculating the net annuity flow is: annuity net flow = total present value of cash net flow annuity present value coefficient.

What are the advantages and disadvantages of annuity net flow?

Advantages of annuity net flow: The annuity net flow method is an auxiliary method of the net present value method, and when the life of each scheme is the same, it is essentially the net present value method. Therefore, it is suitable for investment plan decisions with different horizons.

The disadvantage of the net annuity flow: it is not convenient to make decisions on independent investment plans with unequal original investment amounts.

The difference between the annuity net flow method and the net present value method.

Difference: When the result of the annuity net flow index is greater than zero, the rate of return of the plan is greater than the required rate of return, and the plan is feasible. When two or more plans with different life cycles are selected, the larger the annuity net cash flow, the better the plan.

The net present value method is a method of evaluating investment plans, which uses the total present value of net cash benefits and net cash investment to calculate the net present value, and evaluates the investment plan according to the size of the net present value. If the net present value is positive, the investment option is acceptable; With a negative net present value, the investment option is unacceptable. The greater the NPV, the better the investment scheme.

What are the types of annuities?

An annuity is an equal amount of money received or paid at regular intervals. There are four types of annuities, specifically:

1. Ordinary annuity: the annuity that receives and pays the same amount at the end of each period, also known as the postpaid annuity, is more common in daily life;

2. Immediate annuity: the annuity that receives income at the beginning of each period, also known as the prepaid annuity;

3. Deferred annuity: also known as deferred annuity, refers to a series of equal payments that occur at the end of the first period and after a certain period of time, which is a special form of ordinary annuity;

4. Perpetual annuity: also known as indefinite annuity or permanent annuity, refers to an annuity received and paid in equal amounts for an indefinite period of time, which can be regarded as a special form of ordinary annuity. For example, the interest on the principal deposit and the interest on the indefinite interest-bearing bonds.