第四章净现值.pptx

Chapter Outline4.1 The One-Period Case4.2 The Multiperiod Case4.3 Compounding Periods4.4 Simplifications4.5 What Is a Firm Worth?4.6 Summary and Conclusions4.1 The One-Period Case: Future ValueIf you were to invest $10,000 at 5-percent interest for one year, your investment would grow to $10,500 $500 would be interest ($10,000 × .05)$10,000 is the principal repayment ($10,000 × 1)$10,500 is the total due. It can be calculated as:$10,500 = $10,000×(1.05).The total amount due at the end of the investment is call the Future Value (FV). 4.1 The One-Period Case: Future ValueIn the one-period case, the formula for FV can be written as:FV = C1×(1 + r)Where C1 is cash flow at date 1 and r is the appropriate interest rate.4.1 The One-Period Case: Present ValueIf you were to be promised $10,000 due in one year when interest rates are at 5-percent, your investment be worth $9,523.81 in today’s dollars. The amount that a borrower would need to set aside today to to able to meet the promised payment of $10,000 in one year is call the Present Value (PV) of $10,000.Note that $10,000 = $9,523.81×(1.05).4.1 The One-Period Case: Present ValueIn the one-period case, the formula for PV can be written as:Where C1 is cash flow at date 1 and r is the appropriate interest rate.4.1 The One-Period Case: Net Present ValueThe Net Present Value (NPV) of an investment is the present value of the expected cash flows, less the cost of the investment.Suppose an investment that promises to pay $10,000 in one year is offered for sale for $9,500. Your interest rate is 5%. Should you buy?Yes!4.1 The One-Period Case: Net Present ValueIn the one-period case, the formula for NPV can be written as:If we had not undertaken the positive NPV project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 the investment promised and we would be unambiguously worse off in FV terms as well:$9,500×(1.05) = $9,975 $10,000.4.2 The Multiperiod Cas