Running Head: TIME VALUE OF MONEY1Time Value of Money: Single Cash FlowStudents NameCourse NameInstructors NameDateTIME VALUE OF MONEY2Cash Flow in Corporate FinanceThe idea of cash flow in corporate finance responds to the amount of cash and cashequivalents that move through a business (Chan & Rate, 2018). If the cash flow is positive, itmeans that the value of the company is increasing and it can be able to pay off its debts, pay theshareholders and be able to reinvest. In addition, a negative cash flow shows that the value of thebusiness is reducing, and thus it is straining in its running (Fracassi, 2016). This implies that thebusiness is not in the position to settle the debt.How Present Value and Future Values Are RelatedThe relationship between the present value and the future values are conveyed by thechange in the monetary value over time. The equation that can be used to represent therelationship is PV=FV/(1+r)^t. Increase in either the present value or the future values increasesthe other so long as the interest rate and the period remain the same. In other words, it can besummarized that the relationship between the two values is directl ...
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