Winter 2011 - Week 5 (MTU)[1]

Winter 2011 - Week 5 (MTU)[1] - NPV CF1 CF2 CF3 . CFn CFn...

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Payments over time T. R = interest rate 1 2 3 ... n NPV CF CF CF CF (1 ) n n n C CF R
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Dividends Payments in Perpetuity Payments over infinite time. R = yield to maturity Div PV R
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Growing Dividends Payments in Perpetuity Payments over infinite time. R = yield to maturity Growth rate G Div PV Rg
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Payments over time T. R = interest rate Payback Period
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Payments over time T. R = interest rate Discounted Payback Period
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Payments over time T. R = interest rate IRR
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Problems with IRR 1. Multiple IRR 2. Scale Problems
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Practice Problems 1. My project will initially cost $100M dollars. Afterwords, it will yield 50M per year.
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This note was uploaded on 03/28/2011 for the course ENGR 110 taught by Professor . during the Winter '10 term at UCLA.

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Winter 2011 - Week 5 (MTU)[1] - NPV CF1 CF2 CF3 . CFn CFn...

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