PRESENT VALUE OF ANNUITY - Accounts and Finance for Managers

  • Present value of an annuity - Present value of future cash series - To identify the value of future cash flows on present value
  • Present value of an annuity

Illustration

If you expect to receive Rs.1,000 annually for 3 years, each receipt is expected to be at the end of the years. What would be the present value of future cash inflows @ discount rate of 10% ?
PVA n,k = Rs.1,000 × (2.487)= Rs.2,487


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