* $5,000 compounded annually at 6% for 5 years $6,691.13 * $5,000 compounded semiannually at 6% for 5 years $6719.58 * $5,000 compounded quarterly at 6% for 5 years $6734.28 * $5,000 compounded annually at 6% for 6 years $7092.60

Answer the following: The conclusion that can be drawn about the frequency of compounding interest is that the more frequency the better. The conclusion that can be drawn about the length of time an amount is compounding is the same the more or longer the better. It just keeps adding up.

Calculate the present value of the following:

* $7,000 in 5 years at an annual discount rate of 6% $5230.81
* $7,000 in 5 years at a semiannual discount rate of 6% $5208.66
* $7,000 in 5 years at a quarterly discount rate of 6% $5197.30
* $7,000 in 6 years at an annual discount rate of 6% $4934.73

Answer the following: The conclusion that can be drawn about the frequency of the discounting interval is that the more frequent discounting interval more money that is lost. The conclusion that can be drawn about the length of time until the receipt of that value is the same a loss.

Answer the following: I would chose contract A because they are both paying the same amount for the same amount of time and have the same discount rate. If the money is left in a little longer it might build up more. So I would wait another year to receive the money and let it build. Assume you have a choice between two annuity contracts.

...Presentvalue is where the value on a set date of a future payment is discounted to reflect the time value of money and other factors. This can also apply to a series of future payments. Presentvalue calculations are commonly utilized in business and economics to provide a way to compare cash flows at different times. Presentvalue can be described as...

...Essay.
Net Presentvalue is the difference between an investment’s market value and its cost. For an example, you invest 100 dollars (Cost) into a lemonade stand but you receive 50 dollars (Market Value) of cash inflow. Another would be you buy a house for 50,000(Cost) But you sell it for 75,000(Market Value). Your net presentvalue An Investment should be accepted if the net...

...$34,229.07
Therefore the total cost today of your children’s college expense will be the addition of the 2
= $72,326.88
This is the presentvalue of my annual savings, which are an annuity, so to get the amount I am supposed to save each year would be:
PV=72,326.88
N=15
I=5.5
CPT PMT = 7,205.6
57. Calculating Annuity Values:
Bilbo Baggins wants to save money to meet three objectives. First, he would like to...

...
Net presentValue, Mergers and acquisitions
Abstract
Main objective of undertaking this to report was learn about NPV presentvalue (NPV) method to make capital budgeting decision(Google NEW Project) and success factors involved in mergers and acquisitions(Google-Groupon Case).
Answers to the Assignments
Part I: Google should go ahead with the new project.
Part-II: Google’s acquisition of Groupon would have been win...

...CONCEPT OF PRESENTVALUE SO IMPORTANT FOR CORPORATE FINANCE?
The importance of concept of presentvalue to the world of corporate finance is that presentvalue calculations are widely used in business and economics to provide a means to compare cash flows at different times. Present Value’s definition and simplistic formula used for normal purchases, the concept’s importance to corporate...

...-------------------------------------------------
FINC5001 Capital Market and Corporate Finance
-------------------------------------------------
Workshop 5 – Capital Budgeting II
1. Basic Concepts Review
a) In applying Net PresentValue, what factors do we include, and what factors do we ignore?
Use cash flows not accounting income
Ignore
* sunk costs
* financing costs
Include
* opportunity costs
* side effects
* working...

...transactions (use a 9 percent annual interest rate for all transactions
a. Borrowed $103,000 for nine years. Will pay $9,270 interest at the end of each year and repay the $103,000 at the end of the 9th year.
In transaction (a), determine the presentvalue of the debt.
1. We find PV of ANnuity of $1 for 9 Yrs at 9% = 5.9952
PV of $1 for 9Yrs @9% = 0.4604
So PV of debt = 9270*5.9952 + 103000*0.4604 = $1,02,997
b. Established a plant addition fund of...

...Part I
A. PresentValue with Discount rate of 7% = 15000/(1+7%) = 15000/1.07 = $14,018.69
PresentValue with Discount rate of 4% = 15000/(1+4%) = 15000/1.04 = $14,423.08
B. Account A - PresentValue with Discount rate of 6% = 6500/(1+6%) = 6500/1.06 = $6,132.08
Account B - PresentValue with Discount rate of 6% = 12600/(1+6%)^2 = 12600/1.1236 = $11,213.96
C....

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