But the present value, what does that mean?

Ben has actually done a good job of saying the market value of his inventory, the market value of his equipment.

How much product do you have on hand?

What's the present value of 50 in 1 year?

Hopefully people will be watching this in the next millenia.

That is 100.

42 million in adjusted dollars. That's minus payload, of course.

let me just scroll down so let's say that one year so today, one year so we figured out that 110 a year from now, its present value is equal to so the present value of 110 is equal to 104,76.

Choice number three, the 20 today, the 20 now, well that's just worth 20.

We'll now learn about what is arguably the most useful concept in finance and that is called the present value.

Well, we said let me do that in a different color.

Present value of 100 today is 100.

So that's where it comes from.

Now what's our mantra of this day and age I wonder?

But that's just 1.02 divided by 1, which is just 100. 100 today.

And the notation is PV

I was checking the linen rotation.

Jonathan Switcher, new stock boy.

I'm so unimportant and insignificant.

Get out my virtual Tl 85.

This dollar would be 1.11 to the third.

The ins and outs of being an idiot.

The headmaster's private stock.

My existence is worthless and meaningless.

And then to get its present value, its value today, you divide that by 1.05 again.

When you have a kid you are supposed to be there for them.

So how do you compare the two?

110 divided by 1.05 squared is equal to 99.77.

Now, you might remember from previous videos that the book value of the assets in Ben's company are only 140,000! 20,000 of cash, 100,000 of inventory, 20,000 of... this is not equity, this is equipment I should call it.

I was stock taking.

So it equals 104,76.

So let me just say population.

According to the inventory, we're low on everything.

So that is the value in 2 years.

So the present value of 20 today, well that's just 20.

That is why I believe in the Press.

Not so in Italy.

Anyway.

Actually I meant to present value it.

Just like we did here.

Parliament cooked up a new strategy.

Say, does this building have a food inventory?

And in the first case we assumed a 5 treasury rate.

We're out of stock.

I got a lot of inventory to go through here.