BA II Calculator Workshop CHARTERED FINANCIAL ANALYST Setting up your BAII Calculator Workshop Setting up your calculator (BAII Plus) Decimal places &|F! Set to mathematical precedence &|"&! No. of payments per year &-K Clear time value calculations &0 Calculator Workshop Memory function The calculator can store numbers for you Example: You calculate the answer to 2 + 3.5 = 5.5 and then wish to store it Press D then K (5.5 has now been stored and assigned to button K
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FVn = PV*(1+i)^n | PV = FVn / (1+i)^n Present Value of annuity (PVA): the present value of the cash flows from an annuity, discounted at the appropriate discount rate Individual Cash Flow (CFn): Present value of annuity equation: CF/I x [1-1/(1+i)^n] Present Value of Ordinary Annuity: ***PMT x ((1-(1/1+i^n))/i) PVAn = CF x 1-1/(1+i)^n / i PVAn = present value of an n period annuity | CF = level and equally spaced cash flow | I = discount / interest rate | n = number of periods PVAn
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Chapter One: Introduction Introduction: In our country, bank institutions play a vital role for overall economic growth of the country. People save their money by depositing in banks and banks collect their funds which are investing in further investment. Banks collect their funds with various types of deposits. In our study, we discussed about fixed deposit scheme and deposit pension scheme. Here, we see that both types of deposits’ have different interest rate in different banks. When a fixed
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calculate to present value of 3,000,000 in 15 years you first have to multiply it by the possibility, 0.7 giving you 2,100,000. I then used the equation. 2,100,000* 1/(1.1)^15 giving an answer of $502,723.30. After that I calculated the value of the ordinary annuity from year 6-15 by using the equation 200,000*1/(1.1)^6 with the exponent increasing by one for each year. The annuity came to a total of $763,058.55. Once I added up all three payments it comes to a total present value of $2,265,781.85
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S w 906N01 WILEY INTERNATIONAL Professors Paul Bishop and Stephen Sapp revised this case (originally prepared by Professor Robert Higgins) solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal
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return goes up, the anticipated price goes down. In other words, the ‘better deal’ on the stock (lower price) gets you a higher overall return. Bond: a) The present value of that stream of payments is $785.45. b) When annual interest rate changes to 12.36%, i calculated the semiannual rate (which is 6%) and the present value is re-calculated as $917.59. Beta: a) Beta = (return – riskless rate) / market premium Therefore, Beta = (12% - 5%) / (10%) = 0.7 b) If the stock’s beta was
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Chapter 4 12. The times lines are: | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PV | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | | | 0 | 1 | 2 | 3 | 4 | 5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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the value of a share should be calculated by discounting expected dividends. True or false? 2. Some analysts trumpet the saying “Cash is King.” They mean that cash is the primary fundamental that the equity analyst should focus on. Is cash king? Should a firm that has higher free cash flows have a higher value? 3. Information indicates that a firm will earn a return on common equity above its cost of equity capital in all years in the future, but its shares trade below book value. Those
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the rate of return Comet expects to earn from this equipment. a. | 16.3% | b. | 62.7% | c. | 10% | d. | 20% | ANS: C 2. The earnings of Omega Supply Company have grown from $2.00 per share to $4.00 per share over a nine year time period. Determine the compound annual growth rate. a. | 11.1% | b. | 8% | c. | 22.2% | d. | 100% | ANS: B 3. Mr. Moore is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at
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determining the net benefits of alternative government projects. F 3. An increase in the profits of gasoline dealers on an improved road is a benefit of the road project. F 4. If increases in agricultural land values are viewed as a benefit of an irrigation project, then the market value of projected increased crops should also be included as a benefit of the project. 5. The social rate of discount must equal the opportunity cost of funds used to finance a project. F 6. If a project has a B/C
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