Directions: Solve the present value P, and amount F of the following ordinary annuities. Quarterly payments of P2000 for 5 years with interest rate of 8 % compounded quarterly. 2. Semi-annual payments of P8000 for 12 years with interest rate of 12 % compounded semi-annually 3. Daily payments of P50 for 30 days with interest rate of 20 % compounded daily. 1.

Q: How can the Present-Worth Comparison be done?

A: The present worth method of comparison will diminish the cash flows of every choice to time zero by…

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A: The Efficient Market Hypothesis (EMH) describes a stock market that is both operationally and…

Q: lue (NPV) anc g decisions? Pl

A: Introduction : Net present value  can be understood as the value which depicts the actual worth…

Q: Can you make me a comparison and contrast of present value and future value?

A: Financial Accounting:- Financial accounting includes recording, summarizing and reporting a…

Q: I can't get the right answer becases there is more quantity

A:

Q: Explain renewal probability?

A: Answer: Renewal probability is nothing but the average percentage of renters in a building that is…

Q: What is horizon value?

A: Horizon value is the value of the project or the security at the end of a specified future date. The…

Q: definition of the closing

A: GAP A gap is a part separation in a very security's chart wherever its worth either rises or falls…

Q: he net present value is incorrect. Can you try the problem again?

A: Net Present Value (NPV) The difference between the present value of the cash outflow and inflow at…

Q: What is the horizon value? Why is it also called the terminal valueor continuing value?

A: Horizon value is the value of the expected dividend that will be received after the horizon date.

Q: local minimum or maximum of a function,

A: A high point is called a maximum . A low point is called minimum. Local maximum means there will be…

Q: A project's terminal value is the ______.

A: A project's terminal value is the sum of the future values of the cash inflows compounded at the…

Q: Explain HPRs and Inflation?

A: Answer: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: How do you calulate breakeven point ?

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…

Q: An analysis of what happens to the estimate of net present value when only one input variable is…

A: Net Present Value: It is the present worth of future cash flows and the initial cost of the project.…

Q: A project with a negative NPV should be rejected. O True O False

A: Net present value  = present value of future cash inflows discounted at desired rate of return -…

Q: What type of Risks are exists in the conversion cycle?

A: Cash conversion cycle (CCC) CCC is a tool for tracking the time the company spends to get the cash…

Q: What is the payback method? What are its main strengths and weaknesses?

A: Explain the meaning of the payback method.   The payback period is the expected time period which is…

Q: Is an higher NPV better than a lower NPV and why?

A: The net present value is the difference between sums of the present value of cash inflows and…

Q: ut how is this related to CAPM and beta?

A: The Capital asset pricing tells that the how much should be required rate based on the risk of the…

Q: What is future value, FV?

A: Future Value: The future value is the value of the present amount compounded at an interest rate…

Q: When calculating equivalent values, what do we need to identify?

A: Equivalent values refer to the worth of the amount at any point of time. In other words, it defines…

Q: Internal rate of return approach does not address the issues of scale! Discuss?

A: Capital budgeting is a method used for finding the profitability of investment proposals. These…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: Which project has no rate of return?

A: Answer: IRR is a measure in capital budgeting used to measure the value of the predicted…

Q: What is the definition of “actuarial present value”?

A: Accumulated Benefit Obligation: It is an inexact rate of a company's pension plan liability towards…

Q: ple of when one would choose to use the Payback Period Method instead of the NPV / IRR me

A: Step 1 One of the most important decisions a business owner or management team will ever make is to…

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A: Step 1   One of the most essential choices a business owner or management will ever make is capital…

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A: In stock market trading is done on the basis of the margins and brokers gives margin to to trade but…

Q: What is the difference between positive and negative predictive value?

A: Positive predictive value is the probability that subjects with a positive screening test truly have…

Q: How does the payback method reduce the information search?

A: A capital budgeting tool helps in determining the time needed to recover back the project investment…

Q: Why runaway gap (technical analysis) occur? Explain.

A: Introduction : The mentality underlying a runaway gap would be that dealers who missed the initial…

Q: Does the Present Value (PV) technique is based on return?

A: One of the important decisions that are taken by the management is to make the investment decisions…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.