The sum of the PVs calculated would be the present value of the entire stream. Let us assume that we have three future earnings of $5,000, $5,500, and $8,750 in the years 2008, 2009, 2010.

The formula for perpetual annuities takes a simpler form: Present Value = Payments / Interest Rate In the previous example, an infinite number of payments with a 2.4 percent inflation rate produce ...

Something to keep in mind when determining an annuity’s present value is a concept called “time value of money.” With this concept, a sum of money is worth more now than in the future.

So, if the initial investment is $1,000, and the present values in the first, second and final year are $952.38, $907.03 and $863.84, the net present value is equal to $1,723.25.

Using the 2 Stage Free Cash Flow to Equity, Singapore Land Group fair value estimate is S$2.75 Singapore Land Group's S$2.65 share price indicates it is trading at similar levels as its fair value ...

Or, turning that around, the “present” value of $1.10 one year out is $1.00. You probably wouldn’t want to make an investment that’s estimated to produce a negative NPV.

William R. Bryan, Charles M. Linke, Estimating Present Value of Future Earnings: Experience with Dedicated Portfolios, The Journal of Risk and Insurance, Vol. 55, No ...