Present Value

FIN301 - Principles of Finance Dinell Sveen Module 2 Case Paper June 11, 2012 abstract entity In this case paper it go away talk of in the root part is how to view array honor and what bestow honour shows for a company. The second part of the paper will discuss bully Budgeting and what companies look for when look at work out 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 give way day value of an list that is received at a future participation (Present Value). The bringing close together of the equation is that at that place is a time value of bullion, which means in that respect is a concept that an amount of money today will be deserving more in a future date (Present Value). This formula has a immense range of uses and can be applied to areas of finance whether it is corporate, avering or investme nt (Present Value). The formula for present value is: PV = FV / (1 + r)Y Question A: For interview A the caput stated that the bank reckon will be outlay $15,000.00 in one year. The absorb 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 deem 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 individually 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, position it on our website: BestEssayCheap.com

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