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FIN301 - Principles of Finance Dinell Sveen Module 2 Case Paper June 11, 2012 schema In this case paper it exit deal in the premier part is how to view set respect and what side hold dear shows for a company. The second part of the paper bequeath discuss swell Budgeting and what companies look for when look at budget outcomes. delineate Words: give way Value, Net Present Value, Capital Budgets, dismiss rates, and cost of capital Part I: Present Value is a great tool in pay when trying to calculate the present day respect of an bar that is received at a future run crossways (Present Value). The idea of the equation is that in that respect is a age value of m cardinaly, which means at that place is a concept that an step of m matchlessy today will be value much in a future date (Present Value). This formula has a broad range of uses and can be applied to areas of finance whether it is corporate, savings banking or investment (Present Value). The formula for present value is: PV = FV / (1 + r)Y unbelief A: For doubtfulness A the motility stated that the bank bill will be worth $15,000.00 in one form. The interest rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is sole(prenominal) 4%? PV = FV / (1 + r)Y 15,000.

00/ (1+7%)1=14,018.69 PV = FV / (1 + r)Y 15,000/(1+4%)1=14,423.08 Question B: For head B it stated that there were two bank accounts, consider A and describe B. Account A will be worth $6,500.00 in one year. Account B will be wo! rth $12,600.00 in two years. Both accounts wee-wee 6% interest. What is the present value of each of these accounts? PV = FV / (1 + r)Y 6,500/(1+6%)1=6,132.08 PV = FV / (1 + r)Y 12,600/(1+6%)2=11,213.96 Question C The question for question C states that a silver mine is believed to birth three years worth of gold deposit. Here is how much income this gold mine is projected to land you each year for the next...

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