The present value of benefits (PVB) is equal to Σ(b_t/[1+r_s]^t), with b_t= B_t/(1 + p)^t.

Question

Quizplus · Accepted Answer

This formula is a correct representation of the present value of benefits. The present value of benefits is the current value of the expected cash flows that an individual or entity will receive from a specific investment, after discounting them back to their current value based on the time value of money (represented by the rate r in the formula). The formula includes the benefits to be received, the timing of when they will be received, and the discount rate used to calculate their present value.

The Present Value of Benefits (PVB) Is Equal to Σ(Bt/[1+rs]t)

The Present Value of Benefits (PVB) Is Equal to Σ(B_t/[1+r_s]^t)