But the present value, what does that mean?

loan, or all of the things that are about to happen?

So this is real estate, or building.

The money's worthless.

Them guns are worth more than gold.

I have factory tools worth 500,000, and then that cash will go away.

Money is the measure of worth.

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

Hopefully people will be watching this in the next millenia.

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

That gold is worth more than Freia

No industry. No capital. Money is worthless.

Well, the values of their house went up, and they borrowed against the value of their house.

That is 100.

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

But if you were to present value this let's say they make 1 forever going into the future and you were to present value this using a discount rate.

And of course the pre money valuation is just you just take the pre money valuation plus the amount of cash they're giving us.

5,000 CHF for Willi and for Hans.

I have to pay taxes on my property.

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

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

So what's starting to happen, if you think about money, if you sort of boil money down to an essence, it is literally just an expression of value, an agreed value.

The big residual is always value for money.

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

It's gonna be worth its weight in gold.

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.

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

Let's take a look at some value proposition examples.

Present value of 100 today is 100.

We tend to, all of us even those of us who work in marketing to think of value in two ways.

And the best thing that we as humans have been to be able to come up with is a market.

So that's where it comes from.

So how do you compare the two?

In the last video, we figured out what is the present value of these three different payment timing choices.

So instead of this 500,000 just disappearing expense, you say, no, now I have let's call it F for factory tools.

I wonder if it's worth it.

Real friendship is more valuable than money.

So that is the value in 2 years.

Get out my virtual Tl 85.

This dollar would be 1.11 to the third.

And the notation is PV

land, and their patents, and their copyrights, and their cash, and their buildings, and everything else they have is worth.

But the whole topic, what we're trying to solve, is present value.

THEY'D COMPULSlVELY PUT IT BACK IN THE MACHlNE.

You see, aluminum was the most valuable metal on the planet, worth more than gold and platinum.