ACCOUNTINGANDTHETIMEVALUEOFMONEY幻灯片.pptVIP

Illustration: Jaime Yuen wins $2,000,000 in the state lottery. She will be paid $100,000 at the end of each year for the next 20 years. How much has she actually won? Assume an appropriate interest rate of 8%. 0 1 Present Value What table do we use? 2 3 4 19 20 $100,000 100,000 100,000 100,000 100,000 Present Value of an Ordinary Annuity . . . . . LO 7 Solve present value of ordinary and annuity due problems. 100,000 LO 7 Solve present value of ordinary and annuity due problems. Present Value of an Ordinary Annuity $100,000 Receipts Factor Present Value x 9.81815 = $981,815 i=8% n=20 LO 7 Solve present value of ordinary and annuity due problems. Present Value of an Annuity Due Present value of a series of equal amounts to be withdrawn or received at equal intervals. Periodic rents occur at the beginning of the period. Annuities 0 1 Present Value 2 3 4 19 20 $100,000 100,000 100,000 100,000 100,000 . . . . . 100,000 Present Value of an Annuity Due Illustration 6-31 Comparison of Ordinary Annuity with an Annuity Due LO 7 Solve present value of ordinary and annuity due problems. Illustration: Space Odyssey, Inc., rents a communications satellite for 4 years with annual rental payments of $4.8 million to be made at the beginning of each year. If the relevant annual interest rate is 11%, what is the present value of the rental obligations? Illustration 6-33 LO 7 Solve present value of ordinary and annuity due problems. Present Value of an Annuity Due Illustration: Jaime Yuen wins $2,000,000 in the state lottery. She will be paid $100,000 at the beginning of each year for the next 20 years. How much has she actually won? Assume an appropriate interest rate of 8%. 0 1 Present Value What table do we use? 2 3 4 19 20 $100,000 100,000 100,000 100,000 100,000 . . . . . LO 7 Solve present value of ordinary and annuity due problems. 100,000 Present Value of an Annuity Due LO 7 Solve present value of ordinary and annuity due problems. $100,000 Receipt