TIME VALUE OF MONEY
Unbalanced cash flows
unbalanced cash flows are cash flows that change in amounts between periods. Examples of unbalanced cash flows include business income, royalties,allowances,or any loan structured with unbalanced payments.
When calculating uneven cash flows, you can use given equations, but you will likely have several calculations to perform .Errors have an increased extent of existing with manual calculations. Therefore, if you have a financial calculator or spreadsheet program , you should make use of it when performing uneven cash flow analyses.
Present value of an unbalanced cash flow .
The following equation for calculating the present value of a future payment present value of an unbalanced cash flow has five variable ,PV stands for present value, n
Represents the number of periods ,CF stands for cash flow, i is interest rate, and t represents the current time period.
When calculating uneven cash flows, you can use given equations, but you will likely have several calculations to perform .Errors have an increased extent of existing with manual calculations. Therefore, if you have a financial calculator or spreadsheet program , you should make use of it when performing uneven cash flow analyses.
Present value of an unbalanced cash flow .
The following equation for calculating the present value of a future payment present value of an unbalanced cash flow has five variable ,PV stands for present value, n
Represents the number of periods ,CF stands for cash flow, i is interest rate, and t represents the current time period.
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