Discounted Cash Flow Valuation Flashcards
1
Q
Define
PV
A
Present Value
What cash flows are worth today
2
Q
Define
FV
A
Future Value
What cash flows are worth in the future
3
Q
Formula
Future Value of C per Period for t Periods at r Percent per Period
A
FVt = C x {[(1+r)^t - q]/r}
4
Q
Formula
Annuity Future Value Factor
A
[(1+r)^t -1]/r
5
Q
Formula
Present Value of C per Period for t Periods at r Percent per Period
A
PV= Cx {1-[1/(1+r)^t]}/r
6
Q
Formula
Present Value of a Perpetuity of C per Period
A perpetuity has the same cash flow every year forever
A
PV= C/r
