《财务管理Chapter_03.ppt》由会员分享，可在线阅读，更多相关《财务管理Chapter_03.ppt（30页珍藏版）》请在taowenge.com淘文阁网|工程机械CAD图纸|机械工程制图|CAD装配图下载|SolidWorks_CaTia_CAD_UG_PROE_设计图分享下载上搜索。
1、How To Calculate Present ValuesPrinciples of Corporate FinanceRichard A.Brealey Stewart C.MyersChapter 3McGraw Hill/Irwin3-2McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Topics CoveredwValuing Long-Lived AssetswPV Calculation Short CutswCompound InterestwNomina
2、l and Real Rates of Interest(inflation)wExample:Present Values and Bonds3-3McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValuesDiscount Factor=DF=PV of$1wDiscount Factors can be used to compute the present value of any cash flow.3-4McGraw Hill/IrwinCopy
3、right 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValueswDiscount Factors can be used to compute the present value of any cash flow.3-5McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValueswReplacing“1”with“t”allows the formula to be
4、 used for cash flows that exist at any point in time3-6McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValuesExampleYou just bought a new computer for$3,000.The payment terms are 2 years same as cash.If you can earn 8%on your money,how much money should y
5、ou set aside today in order to make the payment when due in two years?3-7McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValuesExampleYou just bought a new computer for$3,000.The payment terms are 2 years same as cash.If you can earn 8%on your money,how m
6、uch money should you set aside today in order to make the payment when due in two years?3-8McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValueswPVs can be added together to evaluate multiple cash flows.3-9McGraw Hill/IrwinCopyright 2003 by The McGraw-Hi
7、ll Companies,Inc.All rights reserved Present ValueswGiven two dollars,one received a year from now and the other two years from now,the value of each is commonly called the Discount Factor.Assume r1=20%and r2=7%.3-10McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved
8、 Present ValueswGiven two dollars,one received a year from now and the other two years from now,the value of each is commonly called the Discount Factor.Assume r1=20%and r2=7%.3-11McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValuesExampleAssume that th
9、e cash flows from the construction and sale of an office building is as follows.Given a 7%required rate of return,create a present value worksheet and show the net present value.3-12McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Present ValuesExample-continuedAs
10、sume that the cash flows from the construction and sale of an office building is as follows.Given a 7%required rate of return,create a present value worksheet and show the net present value.3-13McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Short CutswSometimes
11、there are shortcuts that make it very easy to calculate the present value of an asset that pays off in different periods.These tolls allow us to cut through the calculations quickly.3-14McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Short CutsPerpetuity-Financia
12、l concept in which a cash flow is theoretically received forever.3-15McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Short CutsPerpetuity-Financial concept in which a cash flow is theoretically received forever.3-16McGraw Hill/IrwinCopyright 2003 by The McGraw-Hi
13、ll Companies,Inc.All rights reserved Short CutsAnnuity-An asset that pays a fixed sum each year for a specified number of years.3-17McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Short CutsAnnuity-An asset that pays a fixed sum each year for a specified number o
14、f years.3-18McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Annuity Short CutExampleYou agree to lease a car for 4 years at$300 per month.You are not required to pay any money up front or at the end of your agreement.If your opportunity cost of capital is 0.5%per
15、 month,what is the cost of the lease?3-19McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Annuity Short CutExample-continuedYou agree to lease a car for 4 years at$300 per month.You are not required to pay any money up front or at the end of your agreement.If your
16、 opportunity cost of capital is 0.5%per month,what is the cost of the lease?3-20McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Growing Perpetuity Growing AnnuitywPV=C/(r-g)wPV=C/(r-g)*(1+g)T/(1+r)TwPV=C*(1/(r-g)-1/(r-g)*(1+g)T/(1+r)T）3-21McGraw Hill/IrwinCopyrig
17、ht 2003 by The McGraw-Hill Companies,Inc.All rights reserved Compound Interest i ii iii iv vPeriods Interest Value Annuallyper per APR after compoundedyear period (i x ii)one year interest rate1 6%6%1.06 6.000%2 3 6 1.032 =1.0609 6.0904 1.5 6 1.0154 =1.06136 6.13612 .5 6 1.00512 =1.06168 6.16852 .11
18、54 6 1.00115452 =1.06180 6.180365 .0164 6 1.000164365=1.06183 6.1833-22McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Compound Interest3-23McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Compound InterestExampleSuppose you ar
19、e offered an automobile loan at an APR of 6%per year.What does that mean,and what is the true rate of interest,given monthly payments?3-24McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Compound InterestExample-continuedSuppose you are offered an automobile loan
20、at an APR of 6%per year.What does that mean,and what is the true rate of interest,given monthly payments?Assume$10,000 loan amount.3-25McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved General FormulaswEffective annual rate(EFF)formulawLimit as m goes to infinitywF
21、or APR=0.06wlimit EFF=0.06183-26McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved InflationInflation-Rate at which prices as a whole are increasing.Nominal Interest Rate-Rate at which money invested grows.Real Interest Rate-Rate at which the purchasing power of an
22、investment increases.3-27McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Inflationapproximation formula3-28McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved InflationExampleIf the interest rate on one year govt.bonds is 5.9%and
23、the inflation rate is 3.3%,what is the real interest rate?SavingsBond3-29McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Valuing a BondExampleIf today is October 2002,what is the value of the following bond?wAn IBM Bond pays$115 every Sept for 5 years.In Sept 200
24、7 it pays an additional$1000 and retires the bond.wThe bond is rated AAA(WSJ AAA YTM is 7.5%)Cash FlowsSept 0304050607115115 115 115 11153-30McGraw Hill/IrwinCopyright 2003 by The McGraw-Hill Companies,Inc.All rights reserved Valuing a BondExample continuedIf today is October 2002,what is the value of the following bond?wAn IBM Bond pays$115 every Sept for 5 years.In Sept 2007 it pays an additional$1000 and retires the bond.wThe bond is rated AAA(WSJ AAA YTM is 7.5%)