CHAPTER 2 How to Calculate Present Values Answers to Problem Sets 1. If the discount factor is .507‚ then .507*1.126 = $1 2. 125/139 = .899 3. PV = 374/(1.09)9 = 172.20 4. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1‚003 5. FV = 100*1.158 = $305.90 6. NPV = -1‚548 + 138/.09 = -14.67 (cost today plus the present value of the perpetuity) 7. PV = 4/(.14-.04) = $40 8. a. PV = 1/.10 = $10 b. Since the perpetuity
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Assuming you are age 21 (thus 14 years from receiving this)‚ what is the present value of this gift if the appropriate discount rate is 8.0%? (Ch5) a. $170‚231 b. $282‚449 c. $442‚619 d. $191‚206 e. $734‚664 2. You need $10‚900 for the down payment on a new car. You presently have $5‚000 in savings for which you expect to earn 6% (annual rate‚ compounded monthly). If you deposit a further $500 each month to this account‚ how long‚ approximately‚ before you will accumulate enough to meet your down
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116 Property‚ Plant and Equipment This version includes amendments resulting from MFRSs with effective dates no later than 1 January 2012. Amendments with an effective date later than 1 January 2012 MFRS 116 has been amended by MFRS 13 Fair Value Measurement*. As those amendments have an effective date after 1 January 2012 they are not included in this edition. * effective date 1 January 2013 559 MFRS 116 CONTENTS paragraphs Preface INTRODUCTION IN1–IN15 MALAYSIAN FINANCIAL
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remove any part of it from the examination room. OTHER NAMES…………….…………………..…….. STUDENT NUMBER………….………..…………….. SESSION 2 EXAMINATIONS NOVEMBER 2012 Unit Code and Name: AFIN252‚ Applied Financial Analysis and Management Time Allowed: 3 hours plus 10 minutes reading time. Total Number of Questions: 50 Multiple Choice Questions plus 8 full response questions. Instructions: 1. PART A (30 marks): There are 50 multiple choice questions. Answers to these must be recorded on a red-coloured General Purpose
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Case 10-4 Lack of Information As indicated in the following memo‚ Lack of Information (LOI) has identified obligations to handle and dispose of asbestos upon retirement of several of its warehouses. Also as reflected in the memo‚ LOI has decided that it is not required to recognize any liabilities related to these obligations because it has asserted that the obligations are not probable or that it does not have sufficient information available. Required: • For each identified obligation
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Examples Of Net Present Value (NPV)‚ ROI and Payback Analysis Introduction Terms and Definitions Net Present Value - Method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time. Discount Rate - Also known as the hurdle rate or required rate of return‚ is the rate that a project must achieve in order to be accepted rather
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Table of Contents 1.1 Introduction 1.2 NET PRESENT VALUE (NPV) 1.3 ADVANTAGES OF NPV 1.4 DISADVANTAGES OF NPV 1.5 PAYBACK 1.6 Arguments in favour of payback 1.7 Debt vs Equity 1.8 Equity equals Ownership (Share Profits and Control) 1.9 Debt: Money You Owe 2.0 ADVANTAGES OF DEBT COMPARED TO EQUITY 2.1 DISADVANTAGES OF DEBT COMPARED TO EQUITY 2.2 Managerial Ownership and Agency Costs 2.3 Concentrated Ownership and Agency Costs 2.4 Debt and Agency Costs 2.5 PECKING ORDER THEORY OVERVIEW
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statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long- term profits. Presumably‚ the current stock value reflects the risk‚ timing‚ and magnitude of all future cash flows‚ both short-term and long-term. If this is correct‚ then the statement is false. 3. Could a company’s cash flow to stockholders be negative in a given year? Explain how this might come about. If a company raises more money from
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How Genetics Affect Me Don’t you ever wonder how your different genetics affect you and the way it works. My different type of genetics have affected me in many ways. I have genetic disorders‚ my first is asthma‚ i’m gonna be talking about that. Then the next is eczema‚ like a skin disorder or rash. After‚ is the genetic/ heritable trait which is my birthmark and my eyes. Then last but not least is the punnett squares and how that affects me. The first topic i chose was genetic disorder that
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Outline how stress affects the body Stress and many stressors can effect the mind and body as a total unit. When one area is effected‚ it becomes a strategic systematic response through all body systems. Stress usually affects the thought process and the ability to pay attention or complete daily tasks. When the stress continues‚ it becomes more deep rooted issue that can lead to depression‚ chronic fatigue‚ lack of sleep‚ creates eating disorders (usually bulemia or binge eating)‚ and eventually
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