PRESENT VALUE OF A SERIES OF EQUAL AND UNEQUAL CASH FLOWS Flashcards
1
Q
The Present Value of an Ordinary Annuity
A
PV = A { [1 - 1/(1+r)^N]/r}
2
Q
What is an annuity due ?
A
mmediate
Cash Flow Plus an Ordinary Annuity
3
Q
Annuity due
A
PV ( Annuity due ) = A { [1 - (1+r) ^ -N ] / r } . (1+r)
4
Q
The Present Value of a Series of Unequal Cash Flows
A
When we have unequal cash flows, we must first find the present value of each individual
cash flow and then sum the respective present values.
5
Q
A
