To calculate the present value of any cash flow, you need the formula below: Present value = Expected Cash Flow ÷ (1+Discount Rate)^Number of periods Thus, for year one, the math would look like ...

Here’s what you need to know about two terms related to annuities — present value and future value. Present value of an annuity vs. future value of an annuity: What’s the di ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money.