Final answer:
The present worth of an infinitely long uniform series of cash flows is known as the capitalized value of the series. This concept is important in financial analysis, utilizing the present discounted value to understand the current value of future cash flows.
Step-by-step explanation:
The present worth of an infinitely long uniform series of cash flows is called the capitalized value of the series. When assessing such cash flows, especially in the context of finance and investments, professionals use the concept of present discounted value (PDV) to determine the value today of amounts to be received in the future. For example, if a firm makes payments of $15 million in the present, $20 million in one year, and $25 million in two years, the present discounted value of these payments would be calculated by using the formula that incorporates the interest rate and the number of years each payment is received. Understanding the present discounted value is crucial when comparing costs and benefits that span from the current period into the future, such as in environmental policy analysis, lottery winnings, or various business and governmental investment decisions.