Present Values
w Given two dollars, one received a year from
now and the other two years from now, the
value of each is commonly called the
Discount Factor. Assume r 1 = 20% and r 2 =
7%.
. 87
. 83
21( 1. 07 )
1. 00
2( 1. 20 )
1. 00
1= =
= =
+
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