The PV/FV tables can be used for Capital Budgeting.
Free Cash Flow is cash flow from cash flow from operations minus:
capital purchases
The rest of the cash flow is "free" and available for making capital purchases. How do you decide what to fund?
One way to decide is to evaluate the PV of each proposed project and fund the highest rated. However, this doesn't take into consideration the cost of the projects.
So instead, use Net Present Value, which is the PV minus the cost for the project.
Another way to rate the projects is look at the Internal Rate of Return which is the percentage return for the project.
Note: this is not an exam topic.
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