This case has two aspects. First, it provides a tutorial on the basic concepts using simple time-value-of-money scenarios connected. The topics of the future value (FV) and present value (PV) will be discussed and examples both for fixed and recurring cash flow situations. In this sense, the derivation and use of four useful time-value-of-money reference tables are presented to highlight the underlying logic, connections and mechanics of determining PVs and FVs. Second, this case offers … Read more »

This case has two aspects. First, it provides a tutorial on the basic concepts using simple time-value-of-money scenarios connected. The topics of the future value (FV) and present value (PV) will be discussed and examples both for fixed and recurring cash flow situations. In this sense, the derivation and use of four useful time-value-of-money reference tables are presented to highlight the underlying logic, connections and mechanics of determining PVs and FVs. Second, this case provides students with several simple vignettes in which they can apply the above-mentioned time-value-of-money insights and techniques. The case can be used effectively in degree and nondegree programs, and it requires no additional reading material. It is well suited for a 90-minute lesson, and all or selected subsets of the vignettes contained therein may be assigned. A Teaching Note is registered faculty.
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Mark E. Haskins
Source: University of Virginia Darden School Foundation
12 pages.
Release Date: 1 June 2011. Prod #: UV5137-PDF-ENG
Development Financial Insights: With a Future Value (FV) and present value (PV) approach HBR case solution