The Time value of Money
Q1) Identify the steps involved in computing future value of multiple cash flows?
When there are multiple cash flows, their values are determined by finding the future value of each cash flow and then adding all the values to ascertain total future value of the multiple cash flows.
Step 1: Ascertain appropriate discount rate to discount cash flows.
Step 2: Finding Future Value for each cash flow using a discount rate ascertained in Step 1.
Step 3: Add up all the values which will be the future value of multiple cash flows.
Q2)Which economic principle is involved in finding the present and future value of multiple ...