Pv of future cash flow
1000 at the end of year 1 2000 at the end of year 2 3000 at the end of year 3 4000 at the end of year 4. It requires an investment of 10000 and offers future cash flow of 14000.
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The PV calculation takes a future amount of cash and discounts it back to the present day.
. Future Value of Cash Flow Formulas. 1 What is Free Cash Flow to Firm or FCFF. The formula for this is.
What is the future value of the following series of cash flows given an interest rate of 10. In order to gain an intuitive understand of Free Cash Flow to Firm FCFF let us assume that there is a guy named Peter who started his business with some initial equity capital let us assume 500000 and we also assume that he takes a bank loan of another 500000 so that his overall finance capital stands at 1000000 1 million. The future value FV of a series of cash flows is the future value at future time N total periods in the future of the sum of the future values of all cash flows CF.
The present future value of any series of cash flows is equal to the sum of the present future values of the individual cash flows. We start with the formula for FV of a present value.
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