This same equation can be rearranged to solve for the equivalence (or present value) of a future sum of money (such as a project net cash flow) received some time in the future. For example, a dollar that we expect to receive one, two, and three years hence is worth today [[cost::0.909 USD]], [[cost::0.826 USD]], and [[cost::0.751 USD]], respectively, if the time value of money is 10% per year compounded annually. Equation (2) expresses this principle of present value: | This same equation can be rearranged to solve for the equivalence (or present value) of a future sum of money (such as a project net cash flow) received some time in the future. For example, a dollar that we expect to receive one, two, and three years hence is worth today [[cost::0.909 USD]], [[cost::0.826 USD]], and [[cost::0.751 USD]], respectively, if the time value of money is 10% per year compounded annually. Equation (2) expresses this principle of present value: |