Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Question
Chapter 4.2, Problem 4.2BCQ
Summary Introduction
To discuss: The opposite of discounting the cash flows to be received in the future back to the present.
Introduction:
The value of dollar at present will not be the same as the value of dollar earned in the future. The value of money deteriorates as the years pass by. Hence, the present value of money is different from the
The present value of money helps in calculating the present value of future cash receipts. The future value of money refers to the amount of dollars that an investment grows over a definite period at a particular rate of interest rate.
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Chapter 4 Solutions
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 4.1 - Prob. 4.1ACQCh. 4.1 - Prob. 4.1BCQCh. 4.1 - In general, what is the future value of 1 invested...Ch. 4.2 - What do we mean by the present value of an...Ch. 4.2 - Prob. 4.2BCQCh. 4.2 - Prob. 4.2CCQCh. 4.2 - Prob. 4.2DCQCh. 4.3 - What is the basic present value equation?Ch. 4.3 - Prob. 4.3BCQCh. 4 - If you invest 500 for one year at a rate of 8...
Ch. 4 - Prob. 4.2CCh. 4 - Suppose you invest 100 now and receive 259.37 in...Ch. 4 - Prob. 1CTCRCh. 4 - Prob. 2CTCRCh. 4 - Prob. 3CTCRCh. 4 - Prob. 4CTCRCh. 4 - Prob. 5CTCRCh. 4 - Prob. 6CTCRCh. 4 - Prob. 7CTCRCh. 4 - Prob. 8CTCRCh. 4 - Prob. 9CTCRCh. 4 - Prob. 10CTCRCh. 4 - Prob. 1QPCh. 4 - Prob. 2QPCh. 4 - Prob. 3QPCh. 4 - Prob. 4QPCh. 4 - Prob. 5QPCh. 4 - Calculating Rates of Return. Assume the total cost...Ch. 4 - Calculating the Number of Periods. At 4.7 percent...Ch. 4 - Calculating Rates of Return. In 2014, an 1874 20...Ch. 4 - Prob. 9QPCh. 4 - Prob. 10QPCh. 4 - Calculating Present Values. You have just received...Ch. 4 - Prob. 12QPCh. 4 - Prob. 13QPCh. 4 - Prob. 14QPCh. 4 - Calculating Rates of Return. Although appealing to...Ch. 4 - Prob. 16QPCh. 4 - Prob. 17QPCh. 4 - Calculating Future Values. You have just made your...Ch. 4 - Calculating Future Values. You are scheduled to...Ch. 4 - Calculating the Number of Periods. You expect to...Ch. 4 - Calculating Future Values. You have 6,150 to...Ch. 4 - Prob. 22QPCh. 4 - Calculating the Number of Periods. You can earn...Ch. 4 - LO2 24. Calculating Present Values. You need...Ch. 4 - Prob. 25QPCh. 4 - Calculating Future Values. You have 20,000 you...
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Similar questions
- According to the time value of money concept, also referred to as the present discounted value, is based on the principle that a sum of money in the present has lesser value than the same sum to be paid in the future. Select one: i. True ii. Falsearrow_forwardwhy does an increase in the discount rate resuce the present value?arrow_forwardWhich of the following is not a variable in the basic present value equation? Multiple Choice Number of payments. Future value. Discount rate. Present value. Time horizon.arrow_forward
- How is discounting used in the context of present values and future values? O To reduce a present amount to its future value O To increase a present amount to its füture value O To increase a future amount to its present value O To reduce a future amount to its present valuearrow_forwardThe present value of a perpetuity cannot be computed, but the future value can. True or False?arrow_forwardDoes Compounding Occur at a Different Rate than that at which payments are made? How?arrow_forward
- a present value is converted to a future value through compounding, explain this to me.arrow_forwardWhat is the difference between the discount rate used for net present value and the internal rate of return methods?arrow_forwardThe difference between the expected return and the actual return is referred to as the unexpected gain or loss. True or False?arrow_forward
- When do you think a person would opt to use the Payback Period Method instead of the Net Present Value or Internal Rate of Return? Give an example.arrow_forwardIs the following statement is true or false? Amortization is not a payment process. True O Falsearrow_forwardDefine Present value and future value. If present value and future value are equal what is the rate? Is future value always greater than present value?arrow_forward
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