why is present value important 
present value is important because it allows investors and businesses to judge whether some future outcome will be worth making the investment today it is also important in choosing among potential investments especially if they are expected to pay off at different times in the future the bottom linepresent value is a way of representing the current value of a future sum of money or future cash flows while useful it is dependent on making good assumptions on future rates of return assumptions that become especially tricky over longer time horizons 