Timing of Cash Flows

Every flow has a date

Discounting each flow at its own time

The intuition for weighting early flows

From single flows to streams to firms

Two investments each return 2,200 dollars total, one paying 1,700 in year one and 500 in year five, the other 500 in year one and 1,700 in year five. At 10 percent, which is worth more today?

What is the general method for valuing a stream of unequal cash flows?

At a 10 percent discount rate, which year's flow retains the smallest share of its face value in present terms?

Why is the timeline especially valuable for streams with unequal, irregular cash flows?

A stream pays differing amounts monthly for two years. Which discount rate belongs in the valuation?

According to the lesson, why does the unequal-payment method complete the valuation toolkit?

In the general formula $PV = \sum \frac{C_t}{(1 + r)^t}$, what does the summation sign instruct you to do with the discounted flows? Answer with one word.

In the same formula, what does $C_t$ denote, the cash flow's size or its date? Answer with one word naming what the subscript t distinguishes.

What debt instrument, priced in the next module as coupons plus face value, is the first full application of the unequal-payment method? Answer with one word.

At 10 percent, which retains less present value, a flow in year ten or a flow in year twenty? Answer with the larger year number.