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Present Worth equivalence:
Since we have developed the relationship to find a future value F given a present value P, we can easily derive the formula to find a (P|F, i, n), which is represented in the Figure.
Figure: Present and Future Worth Equivalence
and the relationship is given by
P =D(l+i)-nP = F(P| F,I,n)
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Terminal cash flows Salvage value Salvage value (SV) is the most common example of terminal cash flows. Salvage value may be defined as the market price of an investment at the
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