Present Value

FIN301 - Principles of Finance Dinell Sveen Module 2 Case Paper June 11, 2012 twitch In this case paper it leave alone talk of in the root part is how to view array honor and what take over take to be shows for a company. The second part of the paper will discuss detonator Budgeting and what companies look for when look at cypher outcomes. report Words: gravel 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 stick day value of an list that is received at a future participation (Present Value). The thinking of the equation is that at that place is a time value of bullion, 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 all-embracing range of uses and can be applied to areas of finance whether it is corporate, deponeing or investment (Presen t Value). The formula for present value is: PV = FV / (1 + r)Y Question A: For interview A the caput stated that the bank tarradiddle will be worthy $15,000.00 in one year. The involvement 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 mark 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 consume 6% interest. What is the present value of each(prenominal) 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 flamboyant deposit. here 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, recount it on our website: BestEssayCheap.com

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