Essentials of Corporate Finance
Essentials of Corporate Finance
8th Edition
ISBN: 9780078034756
Author: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4, Problem 4.2BCQ
Summary Introduction

To discuss: The opposite of discounting the cash flows to be received in the future back to the present.

Introduction:

The value of dollar at present will not be the same as the value of dollar earned in the future. The value of money deteriorates as the years pass by. Hence, the present value of money is different from the future value of money.

The present value of money helps in calculating the present value of future cash receipts. The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate.

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