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PV Function

The PV function calculates the present value factor that you can multiply by the expected cash flow to determine the present value.

PV(number of periods, discount rate)

Where the discount rate is expressed as a percentage.

PV(5,8)

Returns the present value of $1 to be received five years from now at the discount rate of 8%. This value can then be multiplied by the actual future value of a cash receipt.

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