Present Value (PV) is an essential concept in finance and accounting that determines the value today of a sum of money or cash flows that will be received in the future. This evaluation considers the time value of money, recognizing that a dollar received today is worth more than a dollar received in the future due to the potential earning capacity of the money. The present value is calculated by discounting future cash flows back to their value as of today using a specified rate, often referred to as the discount rate. This rate could represent the anticipated rate of return or cost of funds. For example, a cash flow of $1000 expected in 5 years may have a present value of $747 if discounted at 6% per year.

Present Value is widely used in various applications like investment appraisals, loan calculations, and financial modeling. By understanding PV, organizations can make better decisions, such as comparing offers with differing payment structures or valuing long-term contracts. It's integral to concepts like Net Present Value (NPV) and Internal Rate of Return (IRR), which are critical for project evaluation and capital budgeting.