What is the relationship between the present value and time?

The relationship between present value (PV) and time is inverse; as time increases, the present value of a future cash flow decreases. This is due to the concept of time value of money, which states that a dollar today is worth more than a dollar in the future because of its potential earning capacity. Therefore, the longer the time until the cash flow is received, the greater the discounting effect, leading to a lower present value.