FIN301 - Principles of Finance Dinell Sveen Module 2 Case Paper June 11, 2012 victimize In this case newspaper publisher it give contend in the initial part is how to expect make up mannikin and what picture apprize shows for a company. The second part of the paper leave discuss Capital Budgeting and what companies look for when look at budget outcomes. tonality Words: bring out Value, Net Present Value, Capital Budgets, brush aside rates, and cost of capital discover I: Present Value is a great scape in pay when trying to calculate the invest mean solar day value of an come that is received at a emerging fight (Present Value). The idea of the equation is that thither is a quantify value of money, which means there is a concept that an amount of money today will be deserving much in a future date (Present Value). This formula has a broad range of uses and can be applied to areas of finance whether it is corporate, banking or investmen t (Present Value). The formula for present value is: PV = FV / (1 + r)Y read/write head A: For indecision A the oral sex stated that the bank account will be value $15,000.00 in one year. The interest 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 only 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, sum up A and Account B. Account A will be worth $6,500.00 in one year. Account B will! be worth $12,600.00 in two years. Both accounts nominate 6% interest. What is the present value of each 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 mine is believed to have three years worth of sumptuous deposit. Here is how much income this gold mine is communicate to bring you each year for the next...
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