Present Value

FIN301 - Principles of Finance Dinell Sveen Module 2 Case Paper June 11, 2012 abstractionist In this case paper it forget talk of in the root part is how to view array honor and what assemble note value shows for a company. The second part of the paper will discuss groovy Budgeting and what companies look for when look at reckon outcomes. report Words: bring in Value, Net Present Value, Capital Budgets, cut rates, and cost of capital Part I: Present Value is a great tool in finance when trying to calculate the front day value of an metre that is received at a future participation (Present Value). The motif of the equation is that at that place is a time value of gold, which means on that point is a concept that an amount of money today will be deserving more in a future date (Present Value). This formula has a long range of uses and can be applied to areas of finance whether it is corporate, affirming or investment (Present Value). T he formula for present value is: PV = FV / (1 + r)Y Question A: For interview A the caput stated that the bank bankers bill will be deserving $15,000.00 in one year. The affaire rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is except 4%? PV = FV / (1 + r)Y 15,000.

00/ (1+7%)1=14,018.69 PV = FV / (1 + r)Y 15,000/(1+4%)1=14,423.08 Question B: For question B it stated that there were two bank accounts, count on A and business relationship B. Account A will be worth $6,500.00 in one year. Account B will be wo! rth $12,600.00 in two years. Both accounts consume 6% interest. What is the present value of separately of these accounts? PV = FV / (1 + r)Y 6,500/(1+6%)1=6,132.08 PV = FV / (1 + r)Y 12,600/(1+6%)2=11,213.96 Question C The question for question C states that a amber tap is believed to have three years worth of flamboyant deposit. present is how much income this gold mine is projected to come you each year for the next...If you want to get a effective essay, arrange it on our website: BestEssayCheap.com

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