MF2S1 - GSB 531 Managerial Finance Chapter 6 Discounted Cash Flow Valuation Timeline and Cash Flows $150 Now $100 $100 1 year later Cash Flows 2

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1 GSB 531 Managerial Finance Chapter 6 Discounted Cash Flow Valuation Now 1 year later 2 years later 3 years – $150 $100 $100 Cash Flows Timeline Timeline and Cash Flows Positive Cash Flow : Cash You Receive, Up Arrows Negative Cash Flow: Cash You Pay, Down Arrows Present Value with Multiple Cash Flows
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2 A Second Way of Calculating the Present Value PV PMT FV Financial Calculators I/YR N Annuities Constant cash flow, at the beginning of each period: annuity due. A series of constant or level cash flows that occur at the end of each period for some fixed number of periods is called an ordinary annuity.
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3 Annuities – Finding Present Value Annuities – Finding Payments Annuities – Finding Interest Rate
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Annuities – Finding the Number of Payments Annuities – Finding Future Value Perpetuities • Just like an annuity, except that the cash flow stream continues forever. Also called consols. • Payment each period: C.
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This note was uploaded on 11/30/2011 for the course GSB 531 taught by Professor Bing during the Spring '11 term at Cal Poly.

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MF2S1 - GSB 531 Managerial Finance Chapter 6 Discounted Cash Flow Valuation Timeline and Cash Flows $150 Now $100 $100 1 year later Cash Flows 2

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