an Ordinary Annuity (FVoa) is the value that a stream of expected or promised future payments will grow to after a given number of periods at a specific compounded interest. Formula:FVoa = PMT [((1 + i)n - 1) / i]FVoa = Future Value of an Ordinary AnnuityPMT = Amount of each paymenti = Interest Rate Per Periodn = Number of Periods2. Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1;that is‚ they are ordinary annuities (Also note that
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FINANCIAL STATEMENTS Accrual-based approach – revenues are recorded at the point of sale and costs when they are incurred‚ not necessarily when a firm receives or pays out cash Cash flow approach – used by financial professionals to focus attention on current and prospective inflows and outflows of cash 1. Balance sheet a. Assets Cash and Cash Equivalents Marketable securities Accounts receivable Inventories Net property‚ plant and equipment Intangible assets b. Liabilities Accounts
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Chapter 6 The Time Value of Money-Annuities and Other Topics 6.1 Annuities 1) You wish to borrow $2‚000 to be repaid in 12 monthly installments of $189.12. The annual interest rate is: A) 24%. B) 8%. C) 18%. D) 12%. 2) If you have $20‚000 in an account earning 8% annually‚ what constant amount could you withdraw each year and have nothing remaining at the end of five years? A) $3‚525.62 B) $5‚008.76 C) $3‚408.88 D) $2‚465. 3) If you invest $750 every six months at 8% compounded semi-annually
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all the fees incurred as part of the loan package Formulas: Uneven Cashflow Even Cashflow * Annuity – series of equal payments (“PMT”) that occur at regular intervals for a period of time (“t”). * Payment is normally made at the end of the period. For payment occurs at the beginning of the period‚ it is Annuity Due. Perpetuity – infinite series of equal payments Formula: Annuities Formula: Perpetuities When n → ∞‚ PV (Perpetuity) =
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FIN 370 Full Course with Discussion Questions www.paperscholar.com DIRECT LINK TO THIS STUDY GUIDE: http://www.paperscholar.com/fin-370-full-course-with-discussion-questions/ Instantly Download! Get Better Grades in Less Time! 100% Satisfaction Guarantee DESCRIPTION FOR THIS STUDY GUIDE: Includes ALL Written Assignments and the following discussion questions: Define the difference between forecasting and budgeting. What is the difference between an operating budget and a cash budget
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Intermediaries; Financial Risk and Return Concepts in Valuation / Time Value of Money: Present Value vs. Future Value; Simple Interest vs. Compound Interest; Annuities vs. Simple Compounding and Discounting; Future Value of an Ordinary Annuity and Annuity Due Concepts in Valuation: (Continued) Present value of an ordinary annuity and annuity due; Amortization and perpetuity; Concept of nominal rate of interest and effective rate of interest; Problem solving Valuation of Long-term Securities:
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Chapter 4 29. Annuity Present Values What is the value today of a 15-year annuity that pays $500 a year?The annuity’s first payment occurs at the end of year 6. The annual interest rate is 12 percentfor years 1 through 5‚ and 15 percent thereafter. (Ross‚ Stephen A.. Corporate Finance‚ 8th Edition. Irwin/McGraw-Hill‚ 112006. 4.8). 33. Growing Annuity Southern California Publishing Company is trying to decide whether to revise its popular textbook‚ Financial Psychoanalysis Made Simple. The company
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3. (FV of annuity due) To finance your newborn daughter’s education you deposit $1‚200 a year at the beginning of each of the next 18 years in an account paying 8% annual interest. How much will be in the account at the end of the 18th year? A 1200 r 0.08 n 18 48535.51589 FV: $48‚535.52 4. (Rate of return of an annuity) Paul’s Perfect Peugeot says
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ansrs 3705 /-‚SNM ) 4. Find the compounded value of annuity when three equal yearly payments of rs 2000/- are deposited into an account that yields 7% . (ans 6430‚SNM ) 5. Given the interest ( discounting rate ) as 10% you are required to find out the present value of future cash inflows that will be received over next 4 years . Year cash flows ( rs ) 1 1‚000 2 2‚000 3 3‚000 4 4‚000 ( ans 7546‚SNM ) 6. Calculate the PV of annuity of rs 500/- received annually for 4 years‚ when discounting
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1. EP Enterprises has the following income statement. How much net operating profit after taxes (NOPAT) does the firm have? Sales $1‚800.00 Costs 1‚400.00 Depreciation 250.00 EBIT $ 150.00 Interest expense 70.00 EBT $ 80.00 Taxes (40%) 32.00 Net income $ 48.00 a. $81.23 b. $85.50 c. $90.00 EBIT $150.00
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