CAIA: Cash-flow valuation

Explanations, applications and practice for cash-flow valuation.

• Net present value formula and time-zero cash flow

  Read the NPV sum and understand its signs and timing.

  Formulas

• Discounting cash flows with consistent time periods

  Match cash-flow timing, rate conventions and time-zero signs.

  Lessons
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  Net present value calculator

  Discount an initial payment and equally spaced future cash flows.

  Tools

• NPV of unequal annual cash-flow amounts

  Discount an initial outflow and three unequal annual receipts.

  Worked examples