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8. Demonstrate how to find the present and future values of an uneven series of cash...

8. Demonstrate how to find the present and future values of an uneven series of cash flows?

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  • Example of present value
    Statement showing Cash flows
    Particulars Time PVF 6% Amount PV
    Cash Flows              1.00       0.9434                     2,500,000.00      2,358,490.57
    Cash Flows              2.00       0.8900                     2,500,000.00      2,224,991.10
    Cash Flows              3.00       0.8396                     6,500,000.00      5,457,525.34
    Present value of Cash Flows    10,041,007.01
    Example of future value
    Statement showing computations at 9%
    Year Cash flow Future Value at end of Year 4 Working Notes
                                                                                     1.00    1,040.00    1,346.83 1040*1.09*1.09*1.09
                                                                                     2.00    1,270.00    1,508.89 1270*1.09*1.09
                                                                                     3.00    1,490.00    1,624.10 1490*1.09
                                                                                     4.00    2,230.00    2,230.00 2230
       6,030.00    6,709.82
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