Function Library Defined Names C10 B D E F G H 1 Single Cash Flow Present Value 1 2. 3 4 5 2 3 Inputs 4 Single Cash Flow $1,000.00 5 Discount Rate/Period 6% 6 Number of Periods 5 7 8 Present Value using a Time Line 9 Period 0 10 Cash Flows $1,000.00 11 Present Value of Each Cash Flow $ 747.26 12 Present Value 1747.2582 13 14 Present Value using the Formula 15 Present Value $747.26 16 17 Present Value using the PV Function 18 Present Value $747.26 19 20 Single-FV Annuity-FV Single-PV Annuity-PV Loan Readu PRESENT VALUE A cash flow of $1,000.00 will be received in period 5. For this cash flow, the appropriate discount rate/period is 6.0%. What is the present value of this single cash flow? Use worksheet "Single-PV" 1. Select worksheet Single-PV. 2. This problem is like Future Value Problem 1. Note that in a Present Value, you put the payment in the last period (Period s in this case) 3. Text formula for Present Value Using a Timeline 1. Equals (Cash Flow)/((1 + (Discount Rate/Period)) (Period)) 1. (Cash Flow) in a timeline always means the Current Cash Flow. The formula can be written either way. 2. (Period) in a timeline always means the Current Period. The formula can be written either way. 2. Remember that you will be copying this formula, so use absolute cell references when you do not want the value to change and relative cell references when you do. 3. The sum belongs in cell B12. 4. The answer is $747.26 (for each part of this problem) 5. Click the floppy disk icon in the navigation bar to save the file. 4. Text formula for Present Value (cell B15) 1. Equals (Cash Flow)/((1 + (Discount Rate/Period)) (Number of Periods)) 2. Click the floppy disk icon in the navigation bar to save the file. 5. Use the function PV in cell B18. 1. Remember that a single cash flow means that the payment is 0. 2. Click the floppy disk icon in the navigation bar to save the file