Discounting & Present ValueWhy a pound today is worth more than a pound next year.Accounting & FinanceA future cash flow is worth its amount divided byone plus the rate, compounded over the periods.PV = FV ÷ (1 + r)ⁿ · FV = PV(1 + r)ⁿ£1,000 in 3 years at 8%£794 todayPerpetuityPV = C ÷ rForever.Growing perpetuityPV = C ÷ (r − g)g < r.THE COMMON MISTAKEAdding cash flows from different yearsDiscounting each to the same date firstCash flows in different periods are different units. Adding them directly is likeadding metres to seconds.The discount rate carries both the time preference and the risk. Riskierflows get a higher rate and are worth less.Discounting & Present Valuelearnposters.com
Discounting & Present Value — printable business wall chart from LearnPosters. Free vector PDF, US Letter and A4.

What’s on the Discounting & Present Value poster

The rule, 3 worked examples, and the mistake everyone makes.

The discount rate carries both the time preference and the risk. Riskier flows get a higher rate and are worth less.

Questions about the Discounting & Present Value poster

What’s on the Discounting & Present Value poster?
The rule, 3 worked examples, and the mistake everyone makes. A future cash flow is worth its amount divided by one plus the rate, compounded over…; PV = FV ÷ (1 + r)ⁿ · FV = PV(1 + r)ⁿ; £1,000 in 3 years at 8% = £794 today; Perpetuity = PV = C ÷ r; Growing perpetuity = PV = C ÷ (r − g); Common mistake: Adding cash flows from different years → Discounting each to the same…. The discount rate carries both the time preference and the risk. Riskier flows get a higher rate and are worth less.
Who is the Discounting & Present Value poster for?
Discounting & Present Value belongs to the Accounting & Finance section rather than to a school year, because business is not something one grade owns. Anyone learning corporate finance can pin it up — a beginner, a student mid-course, or someone revising years later.
When should you use the Discounting & Present Value poster?
Discounting is the single idea underneath all of corporate finance. A wall chart earns its place by being glanceable from where the work is happening, so Discounting & Present Value belongs on the wall where that business work actually happens, within glancing distance, rather than filed away.
What other posters go with Discounting & Present Value?
Behavioural Finance, Capital Structure and CAPM sit alongside Discounting & Present Value in the Accounting & Finance section. Printed together they make a wall rather than a single sheet, which is how a reference set actually gets used.Behavioural FinanceCapital StructureCAPM
Is the Discounting & Present Value poster free to download and print?
Yes. Discounting & Present Value downloads as a free PDF with no account, no email and no watermark, like everything else in the Accounting & Finance section. Print as many copies as you like for a home, a classroom, a library or a tutoring group; reselling the file is the only thing the licence rules out.Read the licence
What size does the Discounting & Present Value poster print at?
Discounting & Present Value is a vector PDF laid out for US Letter, and prints on A4 with Fit to page — the same file, no separate download. Because every mark on it is drawn rather than photographed, it stays sharp enlarged to A3, A2 or A1 at a copy shop. Colour carries emphasis only, so a greyscale print of Discounting & Present Value loses nothing.Printing guide

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