The net present value calculation is a popular method used by business managers to evaluate the profitability of different projects. It is easy to use but it also has certain limitations. Advantages ...

Here's how to calculate the present value of a perpetual annuity that promises to pay flat or growing annual payments with helpful examples. A perpetual annuity, also called a perpetuity, promises to ...

Too many financial decisions are made without factoring in the time value of money. Whether providing financial planning advice related to a client’s retirement, advising a client about a business ...

In corporate finance and valuation, experts and self-taught learners rely upon various guiding principles. One of those core principles is the time value of money. Whether you’re a professional in the ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

The time value of money sounds like one of those boring economic concepts that a small business owner doesn't have time for – but that would be wrong. Future value and present value are monetary ...

In the world of finance, an annuity is a contract between you and a life insurance company in which you give the company a lump sum or series of payments, and in return, the insurer promises to ...

Rey Adams is an economist and writer. He has 15+ years of professional experience in investment management and consulting. David Kindness is a Certified Public Accountant (CPA) and an expert in the ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of ...

This page contains the spreadsheets which we used in class. If you would like copies for your own use, you may down load them ¨ Finance Basics: Present Value Examples. At the end of the Finance Basics ...