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What is the purpose of discounting future cash flows

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Please describe three (3) methods for calculating the value of an annuity of $100 per year for 5 years starting at t1 using a 6% discount rate. What is the PV of this annuity? Draw a clearly marked timeline demonstrating how this annuity is the difference between two perpetuities. Generally speaking, what is the purpose of discounting future cash flows?

Reference no: EM132791075

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