Given the cash flows below and an interest rate of 3%, solve for the PV. Round to the nearest two decimal places. Period 0 1 2 3 4 5 NCF $0.00 $1,000 $1,030 $1,061 $1,093 $1,126
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Present Value is a current value of future cash flow at specified rate of interest. It is help in decision making also on the basis of future cash flow present value. If the present value of future cash inflow is more than present value of cost than investment deicsion is yes otherwise no.
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