Chapter 5, Problem 5Q

### Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

Chapter
Section

### Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

# To find the present value of an uneven series of cash flows, you must find the PVs of the individual cash flows and then sum them. Annuity procedures can never be of use, even when some of the cash flows constitute an annuity, because the entire series is not an annuity. True or false? Explain.

Summary Introduction

To identify: Whether the given statement is true or false.

Introduction:

Present Value: The present value refers to that value which is the current value and by which the future value of the annuity is determined. The calculation of the future value depends on the present value which is calculated at a discounted rate.

Explanation
• The present value is the current value and on this value, the future value is calculated.
• If a series of cash flows is given, then the present value is not needed to be calculated every time for each individual cash flow...

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