Chapter 12, Problem 3F15

To determine

Present Value:

Present value explains that how much a future sum of money is value today.

At the time of computing present values by using tables these things are required to be considered, first is the ‘annual rate or periodic interest rates’ then second one is the ‘number of years or the number of discounting periods’ involved in it.

Cash flow:

Cash flow refers to the incoming of cash and outgoing of cash due to operating activities of any business. Incoming of cash is known as cash inflow and outgoing of cash is called cash outflow.