Present value is the value today of future cash flows discounted at the appropriate discount rate.

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Present value is a financial concept that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return. This calculation involves discounting future cash flows to account for the time value of money, which is the idea that a dollar today is worth more than a dollar in the future due to its potential earning capacity.

Present Value Is the Value Today of Future Cash Flows