Explain present value of a series of cash flows, Financial Management

Assignment Help:

Q. Explain Present Value of a Series of Cash Flows?

Present Value of a Series of Cash Flows: - In a business circumstances it is very natural that returns received by a firm are spread over a number of years. To approximation the present value of future series of returns the present value of each expected inflow will be calculated.

240_Explain Present Value of a Series of Cash Flows.png

Where PV = total of individual present values of every cash flow

C1, C2, Cn = Cash flows after periods 1,2------n

i= Discounting Rate

Instance: - Given the time importance of money as 10% (that is the discounting factor). You are necessary to find out the present value of future cash inflows that will be received over next four years.

Year

Cash Flows

1

2

3

4

1000

2000

3000

4000

1925_Explain Present Value of a Series of Cash Flows2.png

= 909 + 1652 + 2253 + 2732

= Rs. 7546


Related Discussions:- Explain present value of a series of cash flows

Help ASAP, If firm A has a higher debt-to-equity ratio than firm B then tha...

If firm A has a higher debt-to-equity ratio than firm B then that means what

Explain the meaning of buy-ins, Explain the meaning of Buy-ins This  is...

Explain the meaning of Buy-ins This  is  when  third  party  management  team  make  a  takeover  bid  and  then  run  business themselves. Finance sources are same as to buy-o

What are the needs for financial statement analysis, Q. What are the needs ...

Q. What are the needs for financial statement analysis? The financial statements are to be studies for the following purposes. a) To make comparisons between two sets of fin

Financial position as assets, One of the well-known soccer clubs in Austral...

One of the well-known soccer clubs in Australia, Sydney, has made a decision to include its players on the club's statement of financial position as assets. These players are signe

Define the cash budget, Q. Define the Cash Budget? Cash Budget: - A cas...

Q. Define the Cash Budget? Cash Budget: - A cash budget is an estimation of cash receipts and cash payments for a future period of time. It is prepared to predict the cash requ

Exam answers, Prepare your recommendation on Agarwal Cast Company

Prepare your recommendation on Agarwal Cast Company

Explain about baumol model, Q. Explain about Baumol Model? Baumol Model...

Q. Explain about Baumol Model? Baumol Model: - Baumol model is a mechanism of cash management which is used to determine optimum cash balance. Optimum cash balance is resolute

Financial systems, Financial Systems: The overall financial management ...

Financial Systems: The overall financial management framework will include a number of elements such as: Financial systems designed to capture the details of each financ

What does high inflation have on the value of a business, What impact does ...

What impact does high inflation have on the value of a business? Besides causing distortion (as it unequally affects all goods and services), inflation enhances the uncertainty

Market value ratios, Market Value Ratios Price-Earnings Ratio ...

Market Value Ratios Price-Earnings Ratio P/E ratio shows how much investors are willing to pay for earnings per share of the company. Market-to-Bo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd