private
ashley016
20161107185454assignment_helper_1.xlsxFuture Value Lump Sum (1)
| INPUTS | ||||||
| Future Value (FV) | ? | |||||
| Present Value (PV) | $50,000,000 | |||||
| Interest Rate (i) | 5.0% | |||||
| Time (t) in Years | 12 | |||||
| FV | = | PV | times | 1 + Rate | ^time | |
| $50,000,000 | times | 1.7959 | ||||
| $89,792,816 | --> value account in 12 years | |||||
Present Value Lump Sum (2)
| INPUTS | ||||||
| Future Value (FV) | $50,000,000 | |||||
| Present Value (PV) | ? | |||||
| Interest Rate (i) | 1.0% | |||||
| Time (t) in Years | 3 | |||||
| PV | = | F V | divided | 1 + Rate | ^time | |
| $50,000,000 | divided | 1.0303 | ||||
| $48,529,507 | --> deposit this amount in account today | |||||
Compound Return Lump Sum (3)
| INPUTS | |||||||||
| Future Value (FV) | $3,000,000 | <-- Value Brokerage Account at the end of year 12 | |||||||
| Present Value (PV) | $1,000,000 | <-- Value Brokerage Account at the year 0 | |||||||
| Interest Rate (i) | ? | ||||||||
| Time (t) in Years | 12 | <-- Years funds in account | |||||||
| Raised to | |||||||||
| FV | Divided by | PV | ^ | 1 / years | Less | 1 | |||
| $3,000,000 | Divided by | $1,000,000 | ^ | 0.0833 | less | 1 | |||
| 9.6% | <-- Compound Return this account earned | ||||||||
| try another example | |||||||||
| Investor buys Cisco Stock for $7.50 January 1996 and investor sells Cisco Stock for $53 on January 2000. What compound return did investor earn? | |||||||||
| Years | 4 | ||||||||
| Compute | 63% | <-- Compund Return Earned | |||||||
| Investor buys Cisco Stock for $53 on January 1996 and investor sells Cisco Stock for $26 on January 2016. What compound return did investor earn? | |||||||||
| -3% | <-- Compund Return Earned | ||||||||
FutureValue Multiple CF (4)
| Beginning Year | Cash Flow | Future Value Factor Shown | Future Value Factor | Future Value Cash Flow | |
| 1 | $500,000 | (1+Rate)^ YR | 1.2434 | $621,687 | |
| 2 | $525,000 | 1.2190 | $639,972 | ||
| 3 | $550,000 | 1.1951 | $657,301 | ||
| 4 | $575,000 | 1.1717 | $673,704 | ||
| 5 | $600,000 | 1.1487 | $689,211 | ||
| 6 | $625,000 | 1.1262 | $703,852 | ||
| 7 | $650,000 | 1.1041 | $717,653 | ||
| 8 | $675,000 | 1.0824 | $730,642 | ||
| 9 | $700,000 | 1.0612 | $742,846 | ||
| 10 | $725,000 | 1.0404 | $754,290 | ||
| 11 | $750,000 | 1.0200 | $765,000 | ||
| TOTAL VALUE ACCOUNT END YR 11 --> | $7,696,157 | ||||
| Inputs | |||||
| Interest Rate | 2.0% | ||||
Present Value Multiple CF (5)
| End Year | Cash Flow | Present Value Factor Shown | Present Value Factor | Present Value Cash Flow | ||||
| 1 | $10,000,000 | (1+Rate)^ YR | 1.1500 | $8,695,652 | ||||
| 2 | $10,000,000 | 1.3225 | $7,561,437 | |||||
| 3 | $10,000,000 | 1.5209 | $6,575,162 | |||||
| 4 | $15,000,000 | 1.7490 | $8,576,299 | |||||
| TOTAL CASH RECEIVED --> | $45,000,000 | |||||||
| PRESENT VALUE ACCOUNT YR 0 --> | $31,408,550 | |||||||
| Inputs | ||||||||
| Interest Rate | 15.0% | |||||||
Return Multiple CF (6)
| END YEAR | CASH FLOW | |||
| Buy Verizon Stock December 30 2009 | $32.00 | 0 | -$32.00 | |
| Sell Verizon Stock December 31 2015 | $46.00 | 1 | $1.95 | |
| Receive Dividend 2010 | $1.95 | 2 | $2.00 | |
| Receive Dividend 2011 | $2.00 | 3 | $2.00 | |
| Receive Dividend 2012 | $2.00 | 4 | $2.12 | |
| Receive Dividend 2013 | $2.12 | 5 | $2.20 | |
| Receive Dividend 2014 | $2.20 | 6 | $48.26 | |
| Receive Dividend 2015 | $2.26 | |||
| Compund Return Earned --> | 11.9% | |||
| Note: End YR Cash Flow equals $2.26 Dividend and $46 Sales Price | ||||
