Question 1 (5 points) $50 today is worth MORE than $50 tomorrow. Your Answer Score Explanation True ✔ 5.00 Correct. You understand Time value of money. False Total 5.00 / 5.00 Question Explanation We have assumed time value of money is positive. Question 2 (5 points) At an interest rate of 10% it is better to have $100 today than $120 in 2 years. Your Answer Score Explanation True ✔ 5.00 Correct; it is compounding! False Total 5.00 / 5.00 Question
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1. Consider a 1-Year $10‚000 CD A. The future value of a $10‚000 CD that has a maturity of 1 year at maturity with 10% interest is $11‚000. Financial Calculator Inputs: $ -10‚000=PV‚ 1=N‚ I=10‚ FV=? ($11‚000) B. The future value of a 1-year‚ $10‚000 CD after one year at an interest rate of 5.0% is $10‚500. Financial Calculator Inputs: $-10‚000=PV‚ 1=N‚ 5=I‚ FV=? ($10‚500) The future value of a 1-year‚ $10‚000 CD after one year at an interest rate of 15.0% is $11‚500. Financial
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Capitalisation without growth Earnings Capitalisation with growth Price-Earning Multiple Model 3. Free Cash Flow Models Discounted Free Cash Flow to Equity (FCFE) model Discounted Free Cash Flow to the Firm (FCFF) model 4. Book Valuation (Net Asset Value) Model Discounted Dividend Model The dividend discount model (DDM) is a method of valuing a company based on the theory that a stock is worth the
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any trade body meetings or investors conference. Biyani defied the status quo and challenged the conventional mindset by significantly thinking big. A staunch believer in the group’s corporate credo‚ ‘Rewrite Rules‚ Retain Values‚’ Biyani considers indianness as the core value driving the group. Led by its flagship enterprise Pantaloon Retail‚ today operates around 16 million square feet of retail space in over 85 cities and towns and 65 rural locations across India. Headquartered in Mumbai it employs
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2012 The Modified Internal Rate of Return is an underused measure for selection of projects that a company can choose because it is more effective at dealing effectively with periodic free cash flows that develop from the time that an asset is purchased through its life to the point where it is sold‚ ranking projects and variable rates of return through the project life. The Internal Rate of Return is an inefficient model to make decisions with because it lack the ability
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1. How does Ben ’s age affect his decision to get an MBA? Age will be an important factor affecting his decision of getting an MBA course in multiple ways. After graduated six years ago‚ time has been taken off from education and invested into his career. Keeping on risingwith age and six years break from education‚ it will not only be more difficultto concentrate and remain good attitude towards studies‚ but also keep family and work responsibilities. Moreover‚ he would have only approximately
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1) The risk premium over and above the risk free rate consists of a number of components‚ including all of the following EXCEPT A) inflation risk. B) default risk. C) liquidity risk. D) tax treatment risk. 2) At any time‚ the slope of the yield curve is affected by A) liquidity preferences. B) inflationary expectations. C) the comparative equilibrium of supply and demand in the short-term and long-term market segments. D) all of
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estimate to be 3% per year (i.e.‚ you will contribute $1‚000‚000 plus inflation next year (one year from today)‚ the year after‚ the year after‚ etc.‚). If the interest rate is 8% per year‚ what is the present value of your gift? Question 2 Your friend has a business she wants you to value. The business will not generate any money for the next three years‚ but in the fourth year it will start turning a profit and will make a payment (the first payment) of $150‚000 to the owners at the end of the
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Q1 Definition of ’Accounting Information System - AIS’ The collection‚ storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors‚ creditors and tax authorities. Investopedia
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Approximately how much would that investment be wonh today: $1‚000‚ $10‚000‚ $100‚000‚ or $1‚000‚000 ’1 (b) Whm if the inlerest ratc were 669 ’0? 2. (The 72 nile) The number ot years II required for an investment 1.11 imerest rate I to double in value musl satisfy (1 + I yl = 2 Using In 2 = 69 and the approximation In( I + I ) ~ I valid ror small" show that /I ~ 69/i‚ where i is the interest rate percentage (that is. i = 100‚) Using the better approximation In( 1 +‚ ) ~ ‚ - !/2‚ show that lor‚ ~
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