0 evaluări0% au considerat acest document util (0 voturi)
14 vizualizări2 pagini
Formula for finding the Present Value of several future annual payments. A) ou can ma+e two different investments",he interest you receive on the first investment is $110 per year for three years" ou receive $''0 on the second investment in the third year and nothing in the first two years" -f your discount rate is.%, what should you pay for each of these investments?
Formula for finding the Present Value of several future annual payments. A) ou can ma+e two different investments",he interest you receive on the first investment is $110 per year for three years" ou receive $''0 on the second investment in the third year and nothing in the first two years" -f your discount rate is.%, what should you pay for each of these investments?
Formula for finding the Present Value of several future annual payments. A) ou can ma+e two different investments",he interest you receive on the first investment is $110 per year for three years" ou receive $''0 on the second investment in the third year and nothing in the first two years" -f your discount rate is.%, what should you pay for each of these investments?
What is the present value of the following future payments: a) $1,210 in 2 years at a 10% discount rate: present value = $1,210!1"10) 2 = $1000 #) $1,2$%"&1 in ' years at an (% discount rate: present value = $1,2$%"&1!1"0() ' = $1000 c) $1,0)0 in 1 year at a )% discount rate: present value = $1,0)0!1"0)) 1 = $1000 2. General formula for finding the present value of several future annual payments Present Value = P1/(1+r 1 + P2/(1+r 2 + +(F + Pn/(1+r n !here 1" 2" n = num#er of years$ r = dis%ount rate$ Pn = payment$ F = fa%e value &. Finding Present Values 'sing the General Formula: a) *ou can ma+e two different investments" ,he interest you receive on the first investment is $110 per year for three years" *ou receive $''0 on the second investment in the third year and nothing in the first two years" -f your discount rate is .%, what should you pay for each of these investments/ 0resent 1alue of 21 = $110 3 $110 3 $110 = $2%)"0' !1"0.) !1"0.) 2 !1"0.) '
(ou )ill pay more for investment *1 #) *ou can ma+e two different new products at your plant" 0roduct 21 is e4pected to earn no profit in the first year, $$00 in the second year and $1,000 in the third year" 0roduct 22 is e4pected to earn $$00 per year for three years" 5ssume your cost of capital is 10%" Which product should you ma+e/ 0resent 1alue of 21 = $0 3 $$00 3 $1000 = $ 1,1.)"$' !1"10) !1"10) 2 !1"10) '
+he present value of future profits is higher for produ%t *2" c) 5ssume you have a winning lottery tic+et and the state offers you $$,000 now or payments of $2,000 for three years" -f your discount rate is 10%, which alternative should you choose/ 0resent 1alue = $2000 3 $2000 3 $2000 = $),%&'"&0 !1"10) !1"10) 2 !1"10) '
,hoose a lump sum payment of -."///. 0. Finding 1ond Pri%es 'sing the General Formula: a) 6ind the value of a note with a remaining term of three years, a face value of $10,000 and a coupon of $$00 per year" 5ssume the mar+et yield is )%" 1alue = $$00 3 $$00 3 $10,$00 = $10,2&&"21 !1"0)) 1 !1"0)) 2 !1"0)) ' #) 6ind the value of a note with a remaining term of three years, a face value of $10,000 and a coupon of $$00 per year" 5ssume the mar+et yield is now .%" 1alue = $$00 3 $$00 3 $10,$00 = $%,&'2"(2 !1"0.) 1 !1"0.) 2 !1"0.) ' 1ond pri%es move inversely )ith interest rates. +hey %an #e e2a%tly determined as interest rates %hange.