Present value of annual payments

    • [DOC File]Present financial position and performance of the firm

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      The value of EPIF.06,10 is 7.360, which gives us a present value of $368. Thus, the present value of a stream of $50 annual payments over a 10 year period ($368) is greater than the present value of a single payment of $500 received 10 years from now ($279). Why? Because of the time value of money received earlier in the 10- year period.

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    • [DOC File]ANSWERS TO REVIEW QUESTIONS

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      Present value calculations are the exact inverse of compound interest calculations. Using compound interest, one attempts to find the future value of a present amount; using present value, one attempts to find the present value of an amount to be received in the future. 4-8. An ordinary annuity is one for which payments occur at the end of each ...

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    • Chapter 9

      The estimated value of common stock is the: present value of all expected cash flows. present value of all capital gains. future value of all dividend payments. present value of all dividend payments. (a, moderate) 3. Discounted cash flow techniques used in valuing common stock are based on: a. future value analysis. b. present value analysis ...

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    • [DOC File]Present financial position and performance of the firm

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      The value of EPIF.06,10 is 7.360, which gives us a present value of $368. Thus, the present value of a stream of $50 annual payments over a 10 year period ($368) is greater than the present value of a single payment of $500 received 10 years from now ($279). Why? Because of the time value of money received earlier in the 1- year period.

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    • [DOC File]Annual Compounding - Finance Department

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      If the annual interest rate is nine percent and all payments are made on July 1 of each year, what would the present value of these guaranteed payments be on January 1, 1984? Assume an interest rate of 4.4 percent per six months.

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    • [DOC File]Time Value of Money - University of Connecticut

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      Time Value of Money. ANSWERS TO END-OF-CHAPTER QUESTIONS. 2-1 a. PV (present value) is the value today of a future payment, or stream of payments, discounted at the appropriate rate of interest. PV is also the beginning amount that will grow to some future value. The parameter i is the periodic interest rate that an account pays.

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    • [DOC File]1. This is an annuity of which we know the present value ...

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      This is an annuity of which we know the present value, the annual payment, and the discount rate. We are asked for the life of the annuity. The formula for the present value of an annuity (see B&M p. 40) is given by: In the first case with an annual interest rate of 8%, we can substitute the following values:

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    • [DOC File]1

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      Calculate the present value of 300 paid at the end of each year for 20 years using an annual effective interest rate of 8%. 2945 3181 3312 3561 3750 Calculate the accumulated value immediately after the last payment of a 20 year annuity due of annual payments of 500 per year. The annual …

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    • [DOC File]PRESENT VALUE ANALYSIS

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      Present value of an Annuity Due (annuity in advance) – the discounted value of periodic payments made at the beginning of the period. Galactic Inc. leases a spacecraft for 10 years with annual payments of $6.5 million due at the beginning of each year. If the discount rate is 10%, what is the present value of the lease obligation?

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    • [DOC File]I

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      17 A growing annuity will provide you with 6 annual payments with the first payment of $8,000 occurring 4 years from now. The equilibrium market rate of interest is 10%/year compounded annually and the growth rate of payments is 10%/year. The present value today (rounded to cents) of this annuity is. a) $48,000. b) $43,636.36. c) $39,669.42

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