1 / 62

FIRST PRINCIPLES OF VALUATION

FIRST PRINCIPLES OF VALUATION. TIME VALUE OF MONEY : Six Functions of a Dollar. Future Value of a One Time Deposit Present Value of a Single Future Cash Flow Future Value of an Annuity Present Value of an Annuity Sinking Fund Payment Payment to Amortize Debt.

cedric-reilly
Download Presentation

FIRST PRINCIPLES OF VALUATION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. FIRST PRINCIPLES OF VALUATION

  2. TIME VALUE OF MONEY:Six Functions of a Dollar • Future Value of a One Time Deposit • Present Value of a Single Future Cash Flow • Future Value of an Annuity • Present Value of an Annuity • Sinking Fund Payment • Payment to Amortize Debt

  3. TVM: Future Value of a One Time Deposit with Annual Compounding

  4. TVM: Future Value of a One Time Deposit with Annual CompoundingHP 10B Keystrokes Clear registers Annual compounding $1,000 present value 6% annual interest Two year term Compute future value

  5. TVM: Future Value of a One Time Deposit with Annual Compounding

  6. TVM: Future Value of a One Time Deposit with Periodic Compounding

  7. TVM: Future Value of a One Time Deposit with Periodic CompoundingHP 10B Keystrokes Clear registers Monthly compounding $1,000 present value 6% annual interest 24 months Compute future value

  8. TVM: Future Value of a One Time Deposit with Periodic Compounding

  9. TVM: Quoted Rates vs Effective Annual Rates

  10. TVM: Quoted Rates vs Effective Annual Rates

  11. TVM: Quoted Rates vs Effective Annual Rates

  12. TVM: Quoted Rates vs Effective Annual Rates

  13. TVM: Quoted Rates vs Effective Annual RatesHP 10B Keystrokes Clears registers Monthly compounding 6% annual interest Compute effective rate Display 4 decimal places

  14. TVM: Quoted Rates vs Effective Annual Rates

  15. TVM: Quoted Rates vs Effective Annual RatesHP 10B Keystrokes Clears registers Compute e to 0.06 power Subtract 1 Multiply by 100 to get the percent.

  16. TVM: Quoted Rates vs Effective Annual Rates

  17. TVM: Present Value of a Future CFAnnual Discounting

  18. TVM: Present Value of a Future CF Annual Discounting: HP 10B Keystrokes Clears registers One payment per year $1,000 future value CF in two years 8% annual interest Compute present value

  19. TVM: Present Value of a Future CFAnnual Discounting

  20. TVM: Annuities

  21. TVM: Future Value of an Annual Ordinary Annuity

  22. TVM: Future Value of an Annual Ordinary Annuity HP 10B Keystrokes Clear registers One payment per year $1,200 payment/year 6% annual interest For 3 years Compute future value

  23. TVM: Future Value of an Annual Ordinary Annuity

  24. TVM: Future Value of a Periodic Ordinary Annuity

  25. TVM: Future Value of a Periodic Ordinary AnnuityHP 10B Keystrokes Clears registers Monthly payments $100 payment/mo. 36 months (3 years) 6% annual interest Compute future value

  26. TVM: Future Value of a Periodic Ordinary Annuity

  27. TVM: Future Value of a Periodic Ordinary Annuity

  28. TVM: Future Value of a Periodic Annuity Due

  29. TVM: Future Value of a Periodic Annuity DueHP 10B Keystrokes Clear registers 12 payments per year 6% annual interest $100 payment/mo. Annuity due (BEGIN) 36 monthly payments Compute future value

  30. TVM: Future Value of a Periodic Annuity Due

  31. TVM: Present Value of an Annual Ordinary Annuity

  32. TVM: Present Value of an Annual Ordinary AnnuityHP 10B Keystrokes Clears registers 1 payment per year $1,200 payment/year 3 year term 8% annual interest Compute present value

  33. TVM: Present Value of an Annual Ordinary Annuity

  34. TVM: Present Value of an Annual Ordinary Annuity

  35. TVM: Present Value of a Periodic Ordinary Annuity

  36. TVM: Present Value of a Periodic Ordinary AnnuityHp 10B Keystrokes Clear registers Monthly payments $100 payment/mo. For 36 months 8% annual interest Compute present value

  37. TVM: Present Value of a Periodic Ordinary Annuity

  38. TVM: Present Value of a Periodic Annuity Due

  39. TVM: Present Value of a Periodic Annuity DueHP 10B Keystrokes Clear registers Monthly payments $100 monthly payment 8% annual interest 36 months Annuity due (BEGIN) Compute present value

  40. TVM: Present Value of a Periodic Annuity Due

  41. TVM: Annual Sinking Fund Payment for Ordinary Annuities

  42. TVM: Annual Sinking Fund Payment for Ordinary AnnuitiesHP 10B Keystrokes Clears registers One payment per year 6% annual interest $5,000 future value In three years Compute the annual payment.

  43. TVM: Periodic Sinking Fund Payment for Ordinary Annuities

  44. TVM: Periodic Sinking Fund Payment for Ordinary Annuities

  45. TVM: Periodic Sinking Fund Payment for Ordinary AnnuitiesHP 10B Keystrokes Clear registers Quarterly payments $25,000 future value 24 payments (6 years) 8% annual interest Compute quarterly payment

  46. TVM: Periodic Sinking Fund Payment for an Annuity Due

  47. TVM: Periodic Sinking Fund Payment for an Annuity DueHP 10B Keystrokes Clear registers Quarterly payments $25,000 future value 24 quarterly payments 8% annual interest Annuity due (BEGIN) Compute quarterly payment

  48. TVM: Annual Payment to Amortize Debt for Ordinary Annuities

  49. TVM: Annual Payment to Amortize Debt for Ordinary AnnuitiesHP 10B Keystrokes Clear registers Annual payments $5,000 present value 3 year term 8% annual interest Compute annual payment

  50. TVM: Periodic Payment to Amortize Debt for Ordinary Annuities

More Related