Cash Flow Diagrams

Time and value of money

The future value of money can be convenient to present in cash flow diagram.

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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