公司理财课件英文版
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Investment Criterion
In the one-period case, the formula for NPV can be written aPN sV: P 1C FC V 1r ,dwaho t eeP r1esCFtV 1 is cash flow at If we had not undertaken the positive NPV project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 that investment promised and we would be unambiguously worse off in FV terms as well: $9,500×(1.05) = $9,975 < $10,000.
The total amount due at the end of the investment is call the Future Value (FV).
Net Present Value
❖ The Net Present Value (NPV) of an investment is the present value of the expected cash flows,
less the 来自百度文库ost of the investment.
Back to Example 1:
NPV $9,500 $10,000 1.05
NPV $9,500 $9,523.81 NP$ V 2.8 31: So you should Invest.
Net Present Value as the
be worth $9,523.81 in today’s dollars.
$9,52.381$10,000 1.05
2.1 Net Present Value : FV and PV • The amount that a borrower would need to set
aside today to to able to meet the promised payment
2.2 Project Evaluation in a Riskless World Why do we use NPV as the investment criterion
?Assume Perfect Capital Market and Two Period
C1 Saver (lending)
Use PV to Check Feasibility of Consumption plan
Example 2:
Is the consumption plan C0＝0.9m and C1＝1.325m feasible?
UIfsre＝t1h0e%P,V0.f9o＋r1m.32u5 la＝to2e.1v0a5lu＝aPteV(itC. )＞1＋1 . 2 ＝2.091＝
公司理财课件英文版
ExampleIn1v: estment Decision
Suppose an investment that promises to pay $10,000 in one year is offered for sale for $9,500. Your interest rate is 5%. Should you buy? • If you were to be promised $10,000 due in one year when interest rates are at 5-percent, your investment
of $10,N0o0t0einthoant e$1y0e,a0r0i0s =call the Present Value
(•iPn$ItVfe1)yr0eoo,$su0f9t0w,05e.2r3e.8to1×in(1ve.0s5t)$. 10,000 at 5-percent for one year, your investment would grow to $10,500 : $10,500 = $10,000×(1.05).
B C1
1+r Y1=1.2m
Y 1
slope = -(1+r) Spender (borrowing)
A
C0 C0PV Y (Y 0=)1mY0 (1Y 1r)
(I) Saving (Financing) Decision
IIns cCo＝me(CY0,：C1YY)10fea11s.mi2bmle，?
Consumption
C： CC10
0.9m 1.325m
There is only one interest rate in the perfect capital market. Saver (C0＜1m)：C1 1.2＋(1－C0)(1＋r) Spender (C0＞1m)：C1 1.2－(C0－1)(1＋r) or C0(1C1r)Y0(1Y 1r), IfPV(C P) V(Yth)e, C nisfeasib. le Same equation C1 Y1＋(Y0－C0)(1＋r)
PV(Y)
1 .1
1 .1
1 .325
: not feasib1le. 2
If r＝20%, 0.9＋1 .2 ＝2.004＝PV(C)＞1＋1 . 2
PV(Y)
1 .325
1 .2
1 .3
: not feasib1le. 3
If r＝30%, 0.9＋ PV(Y)
＝1.919＝PV(C)＜1＋
＝2.000＝ ＝1.923＝
R(eaⅡl Inv)estm entIonppvoretusnittiems ent oOutputpportunities
transform input into output：
Consider a farm er with wheat
In the one-period case, the formula for NPV can be written aPN sV: P 1C FC V 1r ,dwaho t eeP r1esCFtV 1 is cash flow at If we had not undertaken the positive NPV project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 that investment promised and we would be unambiguously worse off in FV terms as well: $9,500×(1.05) = $9,975 < $10,000.
The total amount due at the end of the investment is call the Future Value (FV).
Net Present Value
❖ The Net Present Value (NPV) of an investment is the present value of the expected cash flows,
less the 来自百度文库ost of the investment.
Back to Example 1:
NPV $9,500 $10,000 1.05
NPV $9,500 $9,523.81 NP$ V 2.8 31: So you should Invest.
Net Present Value as the
be worth $9,523.81 in today’s dollars.
$9,52.381$10,000 1.05
2.1 Net Present Value : FV and PV • The amount that a borrower would need to set
aside today to to able to meet the promised payment
2.2 Project Evaluation in a Riskless World Why do we use NPV as the investment criterion
?Assume Perfect Capital Market and Two Period
C1 Saver (lending)
Use PV to Check Feasibility of Consumption plan
Example 2:
Is the consumption plan C0＝0.9m and C1＝1.325m feasible?
UIfsre＝t1h0e%P,V0.f9o＋r1m.32u5 la＝to2e.1v0a5lu＝aPteV(itC. )＞1＋1 . 2 ＝2.091＝
公司理财课件英文版
ExampleIn1v: estment Decision
Suppose an investment that promises to pay $10,000 in one year is offered for sale for $9,500. Your interest rate is 5%. Should you buy? • If you were to be promised $10,000 due in one year when interest rates are at 5-percent, your investment
of $10,N0o0t0einthoant e$1y0e,a0r0i0s =call the Present Value
(•iPn$ItVfe1)yr0eoo,$su0f9t0w,05e.2r3e.8to1×in(1ve.0s5t)$. 10,000 at 5-percent for one year, your investment would grow to $10,500 : $10,500 = $10,000×(1.05).
B C1
1+r Y1=1.2m
Y 1
slope = -(1+r) Spender (borrowing)
A
C0 C0PV Y (Y 0=)1mY0 (1Y 1r)
(I) Saving (Financing) Decision
IIns cCo＝me(CY0,：C1YY)10fea11s.mi2bmle，?
Consumption
C： CC10
0.9m 1.325m
There is only one interest rate in the perfect capital market. Saver (C0＜1m)：C1 1.2＋(1－C0)(1＋r) Spender (C0＞1m)：C1 1.2－(C0－1)(1＋r) or C0(1C1r)Y0(1Y 1r), IfPV(C P) V(Yth)e, C nisfeasib. le Same equation C1 Y1＋(Y0－C0)(1＋r)
PV(Y)
1 .1
1 .1
1 .325
: not feasib1le. 2
If r＝20%, 0.9＋1 .2 ＝2.004＝PV(C)＞1＋1 . 2
PV(Y)
1 .325
1 .2
1 .3
: not feasib1le. 3
If r＝30%, 0.9＋ PV(Y)
＝1.919＝PV(C)＜1＋
＝2.000＝ ＝1.923＝
R(eaⅡl Inv)estm entIonppvoretusnittiems ent oOutputpportunities
transform input into output：
Consider a farm er with wheat