# Cash Flow Diagrams

## Time and value of future money

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### Cash Flow Diagram - Loan Transaction

- upward arrows - positive cash flow (receiving the loan)
- downward arrows - negative cash flow (pay off)

*The Present Value* of the cash flows can be calculated by multiplying each cash flow with the * Discount Rate*.

### Cash Flow Diagram - Investment Transaction

- upward arrows - positive cash flows (pay back)
- downward arrows - negative cash flow (investing)

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