Show the present value of a single flow, Financial Management

Assignment Help:

Q. Show the Present Value of a Single Flow ?

Discounting or else Present Value of a Single Flow (Lump Sum):- We are able to determine the PV of a future cash flow using the formula:

PV = FV (1+i) n

Where FV = Future value of the preliminary flow in n years

PV= Present Value

i= Annual rate of interest

n = No. of years

Example: - Mr. X anticipate to have an amount of Rs. 1000 subsequent to one year what should be the amount he has to invest today if the bank if offering 10% interest rate?

PV = 1000 (1+.10) 1

PV = Rs. 909.09


Related Discussions:- Show the present value of a single flow

Define in- order-driven according to trade intermediation, Define the in- o...

Define the in- order-driven according to trade intermediation. In- order-driven markets: In order-driven markets, buyers and sellers trade unswervingly without any intermedi

Calculate the maximum amount, Determine the amounts to be recognised in pro...

Determine the amounts to be recognised in profit or loss and in other comprehensive income in respect of the property for the year ended 31 December 2010.   Evaluate the compliance

Research and development and marketing costs, a) Product orientated busines...

a) Product orientated businesses tend to be produce products and inward looking that they hope will sell in the marketplace. For example, Sony hoped that its $101,500 audio systems

Monthly cash flow, I need to prepare a monthly cash flow for a company with...

I need to prepare a monthly cash flow for a company with the given information, and need to comment on the current performance and the future sales increment. Then we need to find

Define how do mergers affect small businesses, How do mergers affect small ...

How do mergers affect small businesses? A: As per to a recent study by Federal Reserve and Wharton Financial Institutions Center economists, not a big deal. Their analysis reve

Is book value the best proxy to the value of the shares, Is book value the ...

Is book value the best proxy to the value of the shares? No. According to A6 it would be a miracle if the number that appears in the Shareholders' Equity had anything to do wit

Explain short- and long-term financing mix, Q. Explain Short- and long-term...

Q. Explain Short- and long-term financing mix? In forming a fresh business there is no business history to present to the bank thus there is additional uncertainty which will n

Price/yield relationship in bonds, Bond Price is the purchase value o...

Bond Price is the purchase value of a bond. It can be priced either at a premium, discount or at par. It is important for the prospective buyer to know how to det

American stock exchange - amex, It is the third-largest stock exchange by t...

It is the third-largest stock exchange by trading size in the United States. In 2008 it was get hold by the NYSE Euronext and turn into the NYSE Amex Equities in 2009. The AMEX is

List the main features of ordinary shares, Question 1 Describe the types o...

Question 1 Describe the types of investment decisions Question 2 List the main features of ordinary shares Question 3 List the assumptions of Walter's dividend model. Ex

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd