The formula to the left gives the Present Value of a stream of revenue for T periods when the interest rate is the same, r, in every period.

    Suppose a project is expected to yield $1 million in revenue in period 1, $2.5 million in period 2 and $4 million in period 3, and suppose the interest rate is expected to remain at 5% for the entire period. As the computation to the right shows, the value of such a project will be $6.68 million.

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