how to calculate pv of cash flow cumulative pv factor for 12 periods and pv factor...

Question

Question

how to calculate pv of cash flow
cumulative pv factor for 12 periods
and pv factor at nth period

business finance

Answer 1

Answer #1

1: PV of cash flows = Sum of discounted value of cash flows

= CF1/(1+r)^1 + CF2/(1+r)^2 …………CFn/(1+r)^n

2: CumulativePV factor for 12 periods = (1-1/(1+rate)^number of terms)/rate

=(1-1/(1+rate)^12)/rate

3: PV factor at nth period = 1/(1+Rate)^n

Answer 2

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