a-4
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i=
interest
n=
the number of periods
What is the key time value of money (TVM) equation?
FVn=PV(1+i)n
FV=
Future Value
Net PV=
PV-COST
PV=
Present Value
How is perpetuity's present value of calculated?
Pv(Perpetuity)= Payment/ Interest Rate
What are some reasons that a dollar today is generally worth more than a dollar one year from now?
Some of the reasons that a dollar today is generally worth more than a dollar one year from now is because of inflation, different investment opportunities, and interest rates
What is a perpetuity?
__________ is annuities that continue on indefinitely.
What is "discounting"?
__________ is related to present value, because the process of finding the value of present value is discounting.