SCOUT 0 x Present value (PV) represents the value of a future cash flow, or series of cash flows, in today's terms. In a sense, taking the present value of a cash How, or cash flows. Is the opposite of calculating the future value of a cash flow. In calculating future values, you are compounding a cash flow to analyze how much you will have in the future given a rate of return for present values of a future cash flow for you are calculating the amount of cash today that you would need today in order to invest and end up with the amount of that future cash flow In other words, you are discounting future cash flows instead of compounding. That is given a present value PV you se compounding to calculate the ture Value (PV). If you know the future value, you can use discounting to calculate the present value Since annuities involve fixed payments at regular intervals into the future, cating the present of these ture annuty payments is a common task in finance. You can calculate the present value of an ordinary annuity using a formula, tep-by-step process, a financial calculator spreadsheet. For a given fixed payment PMT, interest rate I, and periods from 1 to N, the present Value of an annuity PVA la calated PVAN PNT + MI (147 PMI ++ (TY (11 Which represents a step-by-step process, since you would calculate the present value of each payment individual annuty payment. This simplfies to more condenses formula of: PVA - PMTX Once this present value is calculated, it then becomes more intuitive to compare an annuity to a lump sum received today, since a lump sum of cath received today is already a present value amount However, most commonly these calculations are done in a spreadsheet or financial calculator, which you will practice in the next stage of this problem True or False Given the future value of a cash flow, you can calculate the present value by compounding the future cash now True False