Fundamentals of Corporate Finance ppt

... horizon of t years, the original $100 investment will growto $100 × (1.06)t. For an interest rate of r and a horizon of t years, the future value of your investment will beFuture value of $100 ... cost of $15 billion.1988 Mergers. The 1980s saw a wave of takeoversculminating in the $25 billion takeover of RJRNabisco. Over a period of 6 weeks three groups bat-tled for control of the ... persondoes all day, but we can give you some idea of the variety of careers in finance. Thenearby box summarizes the experience of a small sample of recent (fictitious) graduates.We explained...

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... DEPRECIATION EXPENSES with COST OF LABOR AND MATERIALS.www.LisAri.comv05/15/94 v-1.1p01/14/00INTRODUCTION: BASICS OF CORPORATE FINANCE COURSE OVERVIEWBasics of Corporate Finance serves as an introductory ... claim on the ownership of the company. Often, thenumber of outstanding shares is included on this line.• RETAINED EARNINGS – value of the assets of the company inexcess of the claims upon those ... on a set of assumptions concerning the future operations and finances of a company. Othermethods for estimating corporate value are presented and the relative strengths andweaknesses of each...

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... limited number of years is called an annuity. The present value of astream of cash flows is simply the sum of the present value of each individual cash flow.Similarly, the future value of an annuity ... immediately instead of at the end of the first period.a. Why is the present value of an annuity due equal to (1 + r) times the present value of anordinary annuity?b. Why is the future value of an annuity ... in-stallments of $465,000 each. What is the present value of the jackpot? The interest rateat the time was about 8 percent.The present value of these payments is simply the sum of the present values of...

... Maximize FirmValue?Snippets of HistorySummarySelected material from FUNDAMENTALS OF CORPORATE FINANCE, Third Editionwith additional material from FUNDAMENTALS OF CORPORATE FINANCE, Alternate Fifth ... from: Fundamentals of Corporate Finance, Third Edition by Richard A. Brealey, Stewart C. Myers, and Alan J. Marcus. Copyright© 2001, 1999, 1995, by The McGraw-Hill Companies, Inc. Fundamentals of ... small selection of years and interest rates.Table A.1 at the end of the material is a bigger version of Table 1.6. It presents the fu-ture value of a $1 investment for a wide range of time periods...

... )400,18$900,261000,300873.2500,93000,100935.1000,150000,1500.10ValuePresentFlowCashFactorDiscountPeriod207.1107.11==++=−−=−−TotalNPV20Rate of Return Rulew Accept investments that offer rates of returnin excess of their opportunity cost of capital.ExampleIn the project listed below, ... rate22Opportunity Cost of CapitalExampleYou may invest $100,000 today. Depending on thestate of the economy, you may get one of threepossible cash payoffs:140,000110,000$80,000PayoffBoomNormalSlumpEconomy000,110$3000,140000,100000,80C ... .14350,000350,000400,000investmentprofitReturn =−==39Present ValuesExampleAssume that the cash flowsfrom the construction and sale of an office building is asfollows. Given a 7% requiredrate of return, create...