Time Value of Money Thursday, 5 November 2020,5:43 PM by Asma Hussein Visible to participants on this course The basic present value equation has four parts: What are they? The four parts are the present value (PV), the future value (FV), the discount rate (f), and the life of the investment (t). -FV = PV(1 + r) Present Value - earlier money on a timeline. -Future Value - later money on a timeline. -Discount rate : "exchange rate between earlier money and later money, -Discount rate Cost of capital Opportunity cost of capital - Required return Life of the investment the number of periods