Discount Factors This is the table that shows you the discount factors based on the interest rate and the number of years. E.g. at 10% in year 3 - discount factor is 0.7513. n/i 1 1% 0.9901 2% 0.9804 2 0.9803 0.9612 3 0.9706 0.9423 4 5 6 0.9420 0.8880 0.8375 3% 0.9709 0.9426 0.9246 0.9070 0.8900 0.9151 0.8890 0.8638 0.8396 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7050 4% 0.9615 5% 0.9524 6% 0.9434 0.7903 0.7462 7 0.9327 0.8706 0.8131 0.7599 0.7107 8 0.9235 0.8535 0.7894 0.7307 0.6768 9 0.9143 0.8368 0.7664 0.7026 0.6446 0.6651 0.6274 0.5919 10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 15 0.8613 0.7430 0.6419 16 0.8528 0.7284 17 0.8444 0.7142 18 24 25 26 28 29 222222222222 19 20 0.2145 21 23 0.7876 27 0.7493 30 0.7419 0.6217 0.4919 0.3901 0.7798 0.6095 0.7720 0.5976 0.7644 0.5859 0.7568 0.5744 0.4371 0.5631 0.4243 0.5521 0.4120 0.2330 0.1842 0.1460 0.2198 0.1722 0.1352 0.2678 0.2074 0.1609 0.1252 0.2551 0.1956 0.1504 0.1159 0.2429 0.1846 0.1406 0.1073 0.1741 0.1314 0.0994 7% 8% 14% 0.9346 0.9259 0.8772 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.8163 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.5439 0.5002 0.4604 0.4241 0.3909 0.5083 0.4632 0.4224 0.3855 0.3522 0.3220 0.4751| 0.4289 0.3875 0.3505 0.3173 0.2875 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.3677 0.3262 0.2897 0.2575 0.2292 0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611 0.8114 0.6598 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531 0.8034 0.6468 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462 0.7954 0.6342 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402 0.3101 0.2470 0.1971 0.1577 0.1264 0.1015 0.0817 0.0659 0.0532 0.0431 0.0349 0.4776 0.3751 0.2953 0.1160 0.0923 0.0736 0.0588 0.0471 0.0378 0.0304 0.4637 0.3607 0.2812 0.1064 0.0839 0.0663 0.0525 0.0417 0.0331 0.0264 0.4502 0.3468 0.0976 0.0763 0.0597 0.3335 0.0895 0.0693 0.0538 0.3207 0.0822 0.0630 0.0485 0.3083 0.2314 0.0573 0.0437 9% 0.9174 10% 0.9091 11% 12% 0.9009 0.8929 13% 15% 0.8850 0.8696 0.3606 0.3329 0.3075 0.2843 0.2946 0.2697 0.2472 0.2607 0.2366 0.2149 0.2307 0.2076 0.1869 0.2042 0.1821 0.1625 0.1945 0.1784 0.0754 0.0469 0.0369 0.0291 0.0230 0.0419 0.0326 0.0255 0.0374 0.0289 0.0224 0.0334 0.0200 0.0174 0.0256 0.0196 0.0151
Discount Factors This is the table that shows you the discount factors based on the interest rate and the number of years. E.g. at 10% in year 3 - discount factor is 0.7513. n/i 1 1% 0.9901 2% 0.9804 2 0.9803 0.9612 3 0.9706 0.9423 4 5 6 0.9420 0.8880 0.8375 3% 0.9709 0.9426 0.9246 0.9070 0.8900 0.9151 0.8890 0.8638 0.8396 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7050 4% 0.9615 5% 0.9524 6% 0.9434 0.7903 0.7462 7 0.9327 0.8706 0.8131 0.7599 0.7107 8 0.9235 0.8535 0.7894 0.7307 0.6768 9 0.9143 0.8368 0.7664 0.7026 0.6446 0.6651 0.6274 0.5919 10 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 11 0.8963 0.8043 0.7224 0.6496 0.5847 0.5268 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 15 0.8613 0.7430 0.6419 16 0.8528 0.7284 17 0.8444 0.7142 18 24 25 26 28 29 222222222222 19 20 0.2145 21 23 0.7876 27 0.7493 30 0.7419 0.6217 0.4919 0.3901 0.7798 0.6095 0.7720 0.5976 0.7644 0.5859 0.7568 0.5744 0.4371 0.5631 0.4243 0.5521 0.4120 0.2330 0.1842 0.1460 0.2198 0.1722 0.1352 0.2678 0.2074 0.1609 0.1252 0.2551 0.1956 0.1504 0.1159 0.2429 0.1846 0.1406 0.1073 0.1741 0.1314 0.0994 7% 8% 14% 0.9346 0.9259 0.8772 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.8163 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.5439 0.5002 0.4604 0.4241 0.3909 0.5083 0.4632 0.4224 0.3855 0.3522 0.3220 0.4751| 0.4289 0.3875 0.3505 0.3173 0.2875 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.3677 0.3262 0.2897 0.2575 0.2292 0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229 0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611 0.8114 0.6598 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531 0.8034 0.6468 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462 0.7954 0.6342 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402 0.3101 0.2470 0.1971 0.1577 0.1264 0.1015 0.0817 0.0659 0.0532 0.0431 0.0349 0.4776 0.3751 0.2953 0.1160 0.0923 0.0736 0.0588 0.0471 0.0378 0.0304 0.4637 0.3607 0.2812 0.1064 0.0839 0.0663 0.0525 0.0417 0.0331 0.0264 0.4502 0.3468 0.0976 0.0763 0.0597 0.3335 0.0895 0.0693 0.0538 0.3207 0.0822 0.0630 0.0485 0.3083 0.2314 0.0573 0.0437 9% 0.9174 10% 0.9091 11% 12% 0.9009 0.8929 13% 15% 0.8850 0.8696 0.3606 0.3329 0.3075 0.2843 0.2946 0.2697 0.2472 0.2607 0.2366 0.2149 0.2307 0.2076 0.1869 0.2042 0.1821 0.1625 0.1945 0.1784 0.0754 0.0469 0.0369 0.0291 0.0230 0.0419 0.0326 0.0255 0.0374 0.0289 0.0224 0.0334 0.0200 0.0174 0.0256 0.0196 0.0151
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
Related questions
Question
Answer the questions in this section.
Important note: Questions that require diagrams can be answered on a Word document. Ensure that your answers are clearly labelled.
QUESTION:
Manufacturers is considering renovating their offices at their head office.
1. Use the generated information to calculate the
Investment required R200 000
Expected economic lifetime 5years.
Minimum required
Net annual cash inflows
1st year R40 000
2nd year R100 000
3rd year R90 000
4th year R40 000
5th year R30 000
Transcribed Image Text:Discount Factors
This is the table that shows you the discount factors based on the interest rate and the number of years.
E.g. at 10% in year 3 - discount factor is 0.7513.
n/i
1
1%
0.9901
2%
0.9804
2
0.9803
0.9612
3
0.9706 0.9423
4
5
6
0.9420 0.8880
0.8375
3%
0.9709
0.9426
0.9246 0.9070 0.8900
0.9151 0.8890 0.8638 0.8396
0.9610 0.9238 0.8885 0.8548 0.8227 0.7921
0.9515 0.9057 0.8626 0.8219 0.7835 0.7473
0.7050
4%
0.9615
5%
0.9524
6%
0.9434
0.7903
0.7462
7
0.9327
0.8706
0.8131
0.7599
0.7107
8
0.9235
0.8535
0.7894
0.7307 0.6768
9
0.9143
0.8368
0.7664 0.7026
0.6446
0.6651
0.6274
0.5919
10
0.9053
0.8203
0.7441 0.6756
0.6139
0.5584
11
0.8963
0.8043
0.7224 0.6496
0.5847
0.5268
12
0.8874
0.7885
0.7014
0.6246 0.5568
0.4970
13
0.8787 0.7730
0.6810
0.6006
0.5303
0.4688
0.4150
14
0.8700
0.7579
0.6611
0.5775
0.5051
0.4423
0.3878
0.3405
15
0.8613
0.7430
0.6419
16
0.8528
0.7284
17
0.8444 0.7142
18
24
25
26
28
29
222222222222
19
20
0.2145
21
23
0.7876
27
0.7493
30
0.7419
0.6217 0.4919 0.3901
0.7798 0.6095
0.7720 0.5976
0.7644 0.5859
0.7568 0.5744 0.4371
0.5631 0.4243
0.5521 0.4120
0.2330
0.1842
0.1460
0.2198
0.1722
0.1352
0.2678 0.2074
0.1609
0.1252
0.2551 0.1956
0.1504
0.1159
0.2429 0.1846
0.1406
0.1073
0.1741
0.1314
0.0994
7%
8%
14%
0.9346 0.9259
0.8772
0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561
0.8163 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575
0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718
0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972
0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323
0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759
0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269
0.5439 0.5002 0.4604 0.4241 0.3909
0.5083 0.4632 0.4224 0.3855 0.3522 0.3220
0.4751| 0.4289 0.3875 0.3505 0.3173 0.2875
0.4440 0.3971 0.3555 0.3186 0.2858 0.2567
0.3677 0.3262 0.2897 0.2575 0.2292
0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413
0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229
0.6232 0.5339 0.4581 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069
0.6050 0.5134 0.4363 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929
0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808
0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317
0.1635 0.1377 0.1161 0.0981 0.0829 0.0703
0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584
0.1486 0.1240 0.1037 0.0868 0.0728 0.0611
0.8114 0.6598 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531
0.8034 0.6468 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462
0.7954 0.6342 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402
0.3101 0.2470 0.1971 0.1577
0.1264
0.1015 0.0817 0.0659 0.0532 0.0431 0.0349
0.4776 0.3751 0.2953
0.1160 0.0923 0.0736 0.0588 0.0471 0.0378 0.0304
0.4637 0.3607 0.2812
0.1064 0.0839 0.0663 0.0525 0.0417 0.0331 0.0264
0.4502 0.3468
0.0976 0.0763 0.0597
0.3335
0.0895 0.0693 0.0538
0.3207
0.0822 0.0630 0.0485
0.3083 0.2314
0.0573 0.0437
9%
0.9174
10%
0.9091
11%
12%
0.9009 0.8929
13%
15%
0.8850
0.8696
0.3606
0.3329
0.3075 0.2843
0.2946
0.2697 0.2472
0.2607
0.2366
0.2149
0.2307
0.2076
0.1869
0.2042
0.1821
0.1625
0.1945
0.1784
0.0754
0.0469 0.0369 0.0291 0.0230
0.0419 0.0326 0.0255
0.0374 0.0289 0.0224
0.0334
0.0200
0.0174
0.0256 0.0196 0.0151
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