Fundamentals of Corporate Finance (4th Edition)

Chapter 4

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The present value is calculated by discounting the... more

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The future value is calculated by compounding the ... more

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An example of a perpetuity are the British ... more

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In perpetuity, the present value of each ... more

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Car loans, mortgage, regular deposits in a savings... more

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The only difference is the duration of the cash ... more

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As long as the growing rate is less than the ... more

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The valuation of stock, assets, and a college ... more

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When there is a goal of savings, investors would ... more

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The formula to calculate the future value is: ... more

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No ; The present value and future value formula ... more

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The interest rate and the number of periods should... more

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Since the values of all future cash flows are ... more

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All the cash flows, except the initial and the ... more

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The only difference is the duration of the cash ... more

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Perpetuities include these examples:A perpetual ... more

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A perpetuity having an infinite life but a finite ... more

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Annuities include these examples:An insurance ... more

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The growth rate must be lower than the interest ... more

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Solving for the number of periods would be useful ... more

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$106.53 ; Identify the inputs for calculating the ... more

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$28.49 ; Identify the inputs for calculating the ... more

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Yes, the payments will be enough to pay off the ... more

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Yes, the payments will be enough to pay off the ... more

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From the borrower’s perspective, the timeline of ... more

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From the borrower’s perspective, the timeline of ... more

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$815 ; Identify the inputs for calculating the ... more

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$3,152.5 ; Identify the inputs for calculating the... more

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$142,857.14 ; Determine the present value of the ... more

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$77,704.82 ; Use the following information to ... more

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$20,000 ; Determine the present value of the ... more

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$4,000 ; Identify the present value (PV) and the ... more

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$5,693.25 ; Identify the present value of donation... more

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$14,269.25 ; Identify the cash flow (CF), interest... more

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$23,414.44 ; Identify the cash flows (CF), ... more

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$89,516.50 ; Determine the cash flow (CF), ... more

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$19,250.92 ; Identify the cash flow (CF), rate (R... more

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$14,286 ; Identify the cash flow (CF), interest ... more

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$21,861,456 ; Identify the cash flows (CF), ... more

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$79,823.92 ; Identify the cash flows (CF), ... more

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7.18% ; Identify the future value (FV), present ... more

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20% ; Identify the future value (FV), present ... more

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$50 ; Identify the present value of perpetuity (PV... more

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$24,175.92 ; Identify the total cost (TC), ... more

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$7,505.34 ; Identify the present value (PV), ... more

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$63,849 ; Identify the present value (PV), cash ... more

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$13,232.50 ; Identify the number of periods (N), ... more

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7.27 years ; Identify the present value (PV), ... more

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10% ; Identify the cash flow (CF) and the present ... more

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$5,225.54 ; Identify the cash withdrawals (CF), ... more

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$6,744.25 ; Identify the present value (PV), ... more

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$1,000,000 ; Identify the cash flow (CF) and the ... more

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$9,634.67 ; Identify the cash flows (CF), interest... more

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$56,481 ; Identify the cash flows (CF), interest ... more

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$250,000 ; Identify the cash flows (CF) and the ... more

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$1,259.71 ; Identify the present value (PV), ... more

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2.23% ; more

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The spreadsheet shows the timelines of both ... more

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The net present value is computed by the present ... more

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The net present value is computed by the present ... more

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If the net benefits from the two alternatives can ... more

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