Time Value of Money
Principles of Discounting Cash Flows
See also our special promotion for online courses (links below) and discount voucher of 80%; DCA4FRIENDS

Important: there is a small error in the video…. do you find it? Look into the description to find the correct formula

00:50 – Principles of Discounting Cash Flows
02:00 – Manual calculation of the PV of a series of identical future cash flows
05:00 – Formulas to calculate the PV
06:00 – Spreadsheets and integrated formulas
08:35 – Example of calculations
10:30 – Conclusions

Time Value of Money – Principles of Discounting Cash Flows is about how time decreases the value of future cash flow due to discounting

We already learned about the time value of money and we calculated the future value of cash flow and we also calculated the present value of single cash flow.

Now, we are going to apply this principle on a series of equidistant constant cash flows.

When we have a cash flow C n-years from now, we can discount the cash flow by dividing C with (1+i) to the power n. We do this for all the cash flows and then we add then to find the present value of this series of cash flows.

We also van use built-in formulas in spreadsheet programs like Excel where we can do the calculations using this formula

Present Value = PV(rate, nper, pmt, [fv], [type])

rate = the periodic interest rate
nper = number of periods we have cash flows over
pmt = monthly cash flows
[fv] = eventual remaining FV of the cash flows

More about our online courses:

Get an 80% discount on the listed prices with the voucher code: DCA4FRIENDS

Project Management Basics
Learn the basics about projects and project management in this 14.5-hour course and get yourself a head start over your colleagues and peers
https://www.tabletwise.com/class/6506401121697792/project-management-basics

PMP PreparationPrepare for your PMP Certification with this preparation course. You will also get access to our set of exam questions once you subscribe.
https://www.tabletwise.com/class/6009812586332160/pmp-preparation-course

Subscribe to this channel for more Project Management, Financial, and Business content and leave a comment below if you have any questions.

Website:
http://deceusteracademy.com/

Follow me on FB for more Project Management tips and tricks:
https://www.facebook.com/deceusteracademy/

#PMP #ProjectManagement #DeCeusterAcademy