Present value

Values are the foundation of an individual’s or group’s culture outlining what is good or bad and desirable or undesirable. Behavior and attitude are significantly impacted by values. However, some individuals are torn between two cultures. In The Round House written by Louise Erdrich, Linda Lark is torn between a traditional American Indian culture and a European/Western culture. She depicts the Native American values of humility and giving, but the European/Western value of aggression. In

Part I: A. Suppose your bank account will be worth $15,000.00 in one year. The interest rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? Present Value = Future Value / ((1 + int. rate)^(time periods)) PV = 15,000 / ((1 + .07)^1) PV = 15,000 / 1.07 $14,018.69 What would the present value of the account be if the discount rate is only 4%? PV = 15,000 / (1+ .04)^1 PV = 15,000 / 1.04 $14,423.77 B. Suppose you have two bank accounts

1.8 Life Cycle Costing Purpose Life Cycle Costing (LCC) is an important economic analysis used in the selection of alternatives that impact both pending and future costs. It compares initial investment options and identifies the least cost alternatives for a twenty year period. As applied to building design energy conservation measures, the process is mandated by law and is defined in the Code of Federal Regulations (CFR), Title 10, Part 436, Subpart A: Program Rules of the Federal Energy Management

The Value of Knowing Your Value The ability to provide an accurate valuation of a business is one of the most critical capabilities of an organization when it comes to operations. Valuation is obviously crucial when it comes to the prospect of selling a business but its usefulness starts well before that point in a business’s life. Periodic, accurate valuation of a company is equivalent to the pulse of a company and is perhaps the most critical method of evaluating the impact, either negative or

However, effective July 1, 2011, the ACGA adopted a much more stringent recommendation that the present value of the remainder to the charity be at least 20% (see our earlier commentary). With the rate rebounding to 2.4% and 2.6%, and even with the rate falling to 2.2%, there is no age at which an immediate gift annuity would fail to meet this requirement

time-frame and the resulting net present value. According to our analysis, the net present value over a 15 year life cycle will be -$6,729,171. Recommendation Our recommendation for Ocean Carriers¡¦ is not to enter a contract with the client. Looking at our analysis in Appendix A, this decision would not be in the best interest of the firm. The net present value for this project, assuming a 25 year life with Ocean Carriers¡¦, does not have a positive present value. Through adjusting the contract

perform a net present value analysis. To do this they will only need to look at the incremental cash flows, which are as follows: 1. Initial investment of $10 million that will be the cost to build the new factory. 2. Sales of $3 million a year that will result in an increase of $150,000 in gross margin giving the company a 5% gross margin. 3. Value of salvage at the end of the life of the project of $14 million. NPV Computation The following table displays

proposal that concerns building a new factory and includes the incremental cash flows needed for the net present value, (NPV) analysis. The incremental cash flows identifies sales of $3 million a year that equals an increase in gross margin of $150,000 given a 5% gross margin and initial investment of $10 million that includes the cost of building the new factory (Gitman, 2009). The savage value at the end of the project life equals $14 million. Given a 10% weighted average cost of capital, table

production and existing production, while keeping all other variables constant.  For further detail look at the assumptions and conclusion section Lincoln sports case is faced with a major company altering decision. Through relying on expected net present value of the new cleat production and scenario analysis, the company would determine whether or not taking on the new cleat production would benefit the company. Introduction Lincoln Sports Equipment is a family-owned business based in Springdale,

in order to find the present value of each FCF. Next, the terminal value at year ten was calculated. The following formula was used to do so: terminal value at year 10 = (FCF at year 11)/(WACC - g). This time we used the long-term growth rate of 7up, which was given by the case as 1% less than the industry rate. This resulted in a terminal value of $848M with its present value calculation being $231M. In order to calculate the FMV of 7up, we took the sum of FCF present value, which equaled to $248M