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Cash flow serves to graphically demonstrate financial transactions over a period of time. Time is represented horizontally divided by the number of relevant periods for analysis.
At Appetizer or receipts are represented by upward-pointing vertical arrows and the exits or payments they are represented by vertical downward-pointing arrows. Look at the chart below:
We call it VP O present valuewhich means the value I have on date 0; VF it's the future value, which will be equal to the amount I will have at the end of the flow, after interest, inflows and outflows.
Next: Present Value and Future Value
