What's Required to Calculate Present Value?

D

Present value (PV) is the value today of a future sum of money, calculated by discounting the future cash flows by a given discount rate.

To calculate the present value, you need three inputs:

1. The amount of future cash flows: This represents the amount of money that will be received in the future. It is usually in the form of a series of payments or a lump sum payment.
2. The length of time: This is the time period over which the future cash flows will be received. It is usually measured in years.
3. The discount rate: This is the rate at which the future cash flows are discounted to reflect the time value of money.

Therefore, the correct answer to the question is D) The retained earnings. Retained earnings do not directly affect the calculation of the present value figure. Retained earnings are the portion of a company's profits that are kept by the company instead of being distributed as dividends to shareholders. Retained earnings are important for a company's financial health, but they are not relevant to the calculation of present value.