421.1
1.What does a "present value" represent? That is, when we say that $1000 to be
received 10 years from today has a present value of $558.39, what does that mean?
The present value is what it would cost you today to replicate the future cash flow yourself given your discount rate (or opportunity cost of capital). That is what the future cash flow is worth to us today--what it would cost us to replicate it ourselves and not a penny more.