Question

In: Accounting

The present value of maintenance costs for E-government Basic and E-government Plus is

Expert Solution

I think your question is not complete.

Please upload the complete question.

I am explaining to you, How the present value is calculated in general.

CASH FLOW	Present Value Factor	Present Value of Cash Flow
(A)	(B)	(A X B)

You can understand that if you can buy a pen for $1 today, you have to pay extra for that after 5 years.

It happens because of various factors like inflation, interest rate, etc.

So for knowing today's worth of future cash flow, we calculate the present value.

Present Value Factor is also known as Discounting factor.

It is calculated as

where i = Expected Interest rate or Growth Rate

and t = time period.

So, By multiplying Cash flow with the present value factor, we will get Present Value.

I hope it will help you in the study.

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Thank You!

ekkarill92 answered 2 years ago

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