Question: MEGAN: So, what is a present value, and why is it important to be able to calculate it? JORDAN: According to Dr. Boudreaux, an asset's

MEGAN: So, what is a present value, and why is it important to be able to calculate it? JORDAN: According to Dr. Boudreaux, an asset's present or value is the current value of the cash flows that it will pay or receive in the future. MEGAN: Wait! Can you give me an example of when it would be appropriate to calculate a present value? JORDAN: Sure, but it might make more sense for you to identify such a situation. So, tell me in which of the following two scenarios you would use a present value calculation, and then explain why that is so

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