Formulae: PV=(1+r) and FV=PV(1+r), 1. Present Value: What is the present value (PV) of 5 to0 cash flow for the following combinations of discount. flows and times? c. Suppose you get two cach flows, 5100 at the end of 10 yoats, Its present value from part (a) is You also get 5100 at the end of 20 years. The present value of these $100 is The sum of present value of both the cash flows is 5 2. Future Value at 8% What is the future value (FV) of 5100 for (a) 10 years and for (b)20 years a. FV=(1+) 3. Interest Rate: or (1+r)=(= or r=1== b. =(1+r), so (1+r)== or (1+r)=(= or r=1= 4. Annuity: 4(a) Consider the following cash flows. What is the present value of the 3 negative cash flows at 10% ? 4 (b) If a cash flow at t=0 is +10.000, then what is the net present value? NPV=PV+