Time and the value of money in the future
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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