FIN 300 Lecture Slides Ch. 4

FIN 300 Lecture Slides Ch. 4 - Click to edit Master...

This preview shows pages 1–12. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Click to edit Master subtitle style 2/1/11 Timeline 2/1/11 Example 4.1 Constructing a 2/1/11 Example 4.1 Constructing a Date 01234 l--------l------l-------l--------l Cash Flows-\$5,000-\$5,000-\$5,000-\$5,000 \$0 2/1/11 Equation 4.1 Future Value of a Cash Flow FVn = C * (1+r) * (1+r) * . . . . * (1+r) ---------------------------------------- N times = C * (1+r)n 2/1/11 Equation 4.2 Present Value of PV = C / (1+r)n = C (1+r)n 2/1/11 Example 4.2 Present Value of 2/1/11 Example 4.2 Present Value of 0 1 2 . . . 9 10 l-------l-------l------l--------l \$15,000 PV = 15,000 = \$8,375.92 today (1.06)10 2/1/11 4.2 The Three Rules of Time • Comparing and Combining Values • Moving Cash Flows Forward in Time • Moving Cash Flows Back in Time 2/1/11 Table 4.1 The Three Rules of 2/1/11 Example 4.3 Computing the Want plan to save \$1,000 today and at the end of each of the next two years. At a fixed 10% interest rate, how much will we have in the bank three years from today? 2/1/11 Example 4.3 Computing the • Time line 0 1 2 3 l-------l-------l------l \$1,000 \$1,000 \$1,000 Year 0& Year 1& Year 2& 2/1/11...
View Full Document

{[ snackBarMessage ]}

Page1 / 37

FIN 300 Lecture Slides Ch. 4 - Click to edit Master...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online