策略分析工具分析方法bainmath.ppt

* CU7112997ECA Bain Math Present Value - Exercise (2) *The present value is negative because this is the cash outflow required today receive a cash inflow at a later time 1) $10.00 today, PV = $10.00 2) $20.00 five years from today, For HP12C: 5 16 3) A perpetuity of $1.50, PV = = $9.38 4) A perpetuity of $1.00, growing at 5%, PV = = $9.09 5) A six year annuity of $2.00, PV = - =$7.37 $1.50 0.16 $1.00 0.16-0.05 The option with the highest present value is #1, receiving $10.00 today $2.00 0.16 1 (1+ 0.16)5 $2.00 0.16 FV i PV N =(9.52)* 20 ( ) ( ) PV = = $9.52 $20.00 (1+0.16)5 Answer: * CU7112997ECA Bain Math Risk and Return Not all investments have the same risk investing in the U.S. stock market is more risky than investing in a U.S. government treasury bill, but less risky than investing in the stock market of a developing country Most investors are risk averse - they avoid risk when they can do so without sacrificing return Risk averse investors demand a higher return on higher risk investments A safe dollar is worth more than a risky one. * CU7112997ECA Bain Math Net Present Value Net present value (NPV) is the method used in evaluating investments whereby the present value of all case outflows required for the investment are added to the present value of all cash inflows generated by the investment Cash outflows have negative present values; cash inflows have positive present values The rate used to calculate the present values is the discount rate. The discount rate is the required rate of return, or the opportunity cost of capital (i.e., the return you are giving up to pursue this project) An investment is acceptable if the NPV is positive In capita