FIN 419 Week 2 DQs - WEEK 2 DQ 1 What is the difference...

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WEEK 2 DQ 1 What is the difference between present values and future values? PV is defined as the value at present time whereas FV is defined as the expected or received value in future. As per Gitman who stated in 2006 that the techniques of FV just calculate the cash flows when the projects ends its life however the techniques of PV calculates the cash flows when the project begins and it has zero life. How would you use present and future value techniques in preparing a financial plan for retirement? While organizing an investment plan for leaving from the company retirement you can use PV and FV procedures in order to verify the favored age of retirement. Let’s say if one wants to retire today he knows that he had X amount of dollars however one could easily find the FV of the present amount if one wants to continue the project for a longer period of time. How would various required rates of return affect your decision? Explain. Rates of return can influence the conclusion because of the lower value of rate of inflation than its investment. But if the situation is opposite where the value of rate of inflation is higher than it
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