公司理财(双语)present value.pptVIP

Example You are considering an investment that will pay you $100 in one year and $200 in two years. If you want to earn 7% on your money in the first year and 7.7 % in the 2nd year, how much would you be willing to pay? * 34 3- * Chapter 3 Principles of Corporate Finance Ninth Edition How To Calculate Present Values Topics Covered Valuing Long-Lived Assets Looking for Shortcuts – Perpetuities and Annuities More Shortcuts – Growing Perpetuities and Annuities Present Values Discount Factors can be used to compute the present value of any cash flow. Present Values Example You just bought a new computer for $3,000. The payment terms are 2 years same as cash. If you can earn 8% on your money, how much money should you set aside today in order to make the payment when due in two years? Present Values Replacing “1” with “t” allows the formula to be used for cash flows that exist at any point in time Present Values Example You will receive $200 risk free in two years. If the annual rate of interest on a two year treasury note is 7.7%, what is the present value of the $200? Example You will receive $200 risk free in two years. If the annual rate of interest on a two year treasury note is 7.7%, what is the present value of the $200? Example You will receive $200 risk free in two years. If the annual rate of interest on a two year treasury note is 7.7%, what is the present value of the $200? Example You will receive $200 risk free in two years. If the annual rate of interest on a two year treasury note is 7.7%, what is the present value of the $200? Present Values PVs can be added together to evaluate multiple cash flows. Present Values PVs can be added together to evaluate multiple cash flows. Present Values Present Value Year 0 100/1.07 200/1.0772 Total = $93.46 = $172.42 = $265.88 $100 $200 Year 0 1 2 Present Values Example Assume that the cash flows from the construction and sale of an office building is as follows. G