Time Value of Money 1. The present value of money, also referred to as discounted value, is the current worth of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discounted rate, and the higher the discounted rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or obligations. (Chapter 9 Page 257
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Assignment ACC206 1. Basic present value calculations Future Value $12,000.00 Years: 5 Rate: 12% Present Value = $6,809 Annual Cash Flow $16,000.00 Duration 12 Rate 14% Present Value $90,565 Rate 10% Year Cash Flows Present Value 0 $ - $ - 1 $15,000.00 $13,636.36 2 $ - $ - 3 $10,000.00 $7,513.15 Present value $21,150 Rate 16% Year
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savings of 600.00 without any guarantee of quality and timeliness of delivery over Juan’s assurance of quality and timely delivery. The choice is made and we can surmised that COST matters and quality is sacrificed it’s because of how one person values is influenced in our decision . 2. Implications of Frequent Interest Payment . Assume that I invested P5,000.00 @ 12% per annum. Assumption : | | Rate | 12% | | | Investment | 3,000.00 | | | | | a. Annually | | FV = 3
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INVESTING IN APPLE INCORPORATION FIN 534-Financial Management 3 March 2015 Abstract In my paper, I will provide the rationale for selecting Apple Incorporation for which to invest. I will also determine the profile of the investor for which this company may fit. I will then use five financial ratios to analyze the past three years of the company’s financial data. Based on my review I will determine the risk level of the company indicating key strategies they may
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Management controls are about influencing human behavior Result control (USA) Check results to make sure that employees make right results Performance measurement: * Financial * Non-financial Incentives: * Extrinsic * Intrinsic Elements of result controls * Empowerment & decentralization * Performance indicators & targets * Consequences of own actions and decisions * Rewards * Manu organizational levels: alignment Conditions for effective results controls:
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RMIT FINAL EXAMINATION FACULTY OF BUSINESS SCHOOL OF ECONOMICS AND FINANCE BAFI-1100 FINANCIAL DECISION MAKING FIRST SEMESTER 2004 DATE: TIME: INSTRUCTIONS: 1. This is a CLOSED BOOK EXAMINATION 2. The examination represents 60% of the assessment in this subject. 3. All answers are to be made on the examination paper. 4. All questions should be attempted; there is no choice between questions 5. The use of a calculator is permitted, however
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sell without significant loss in value Product risk- products may be flawed or services may not meet your expectations. Retailers may not honor their obligations Personal Risk: Risk of Death- Premature death may cause financial hardship to family members left behind Risk of income loss- Your income could stop as a result of job loss or because you fall ill or are hurt in an accident Health Risk- Poor health may increase your medical costs. At the same time, it may reduce your working capacity
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Practice Questions for Online Test Time Value of Money Question 1 Eddie places $2,000 in a savings account earning 6% interest compounded annually. How much will he have 9to the nearest $) in the account at the end of 8 years? Select one: A. $960.00 B. $2,960.00 C. $3,174.00 D. $3,188.00 E. $3,333.00 Question 2 What is the present value (to the nearest $) of the following payment stream discounted at 8% annually: $1,000 at the end of year1, $2,000 at the end of year 2, and $3,000
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How to use Microsoft Excel for financial calculations? Microsoft Office Excel is a great computer program that is widely used throughout the financial industry. Excel is an invaluable tool in Finance and Accounting. Of course professionals also use special financial calculators. But a financial calculator can be expensive for students. It is not intuitive to use and unless they become investment bankers or realtors, most students will never use it after finishing the financial course. Fortunately
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"Time Value of Money and Annuity" Please respond to the following: • From the e-Activity, create a personal scenario that exemplifies the time value of money that includes the opportunity cost involved. According to Investopedia, the time value of money is the concept that money available today is worth more than the same amount of money in the future based on its earning potential up until the time the future amount is received. It is the potential of money to grow in value over time. The basic
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