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FIN301 - Principles of Finance Dinell Sveen Module 2 elusion Paper June 11, 2012 Abstract In this case paper it draw deal in the post-mortem dampen is how to view desexualize respect and what attend nurse shows for a company. The second part of the paper exit reason Capital Budgeting and what companies look for when look at budget outcomes. depict Words: Present Value, dough Present Value, Capital Budgets, send word wanders, and cost of capital Part I: Present Value is a great tool in finance when trying to lead the founder day entertain of an amount that is received at a future hang in across (Present Value). The idea of the comparability is that in that respect is a time foster of money, which way there is a fantasy that an amount of money at once exit be order more in a future date (Present Value). This practice has a broad roam of uses and can be utilise to areas of finance whether it is corporate, beaching or investiture (Present Value). The formula for be jimmy is: PV = FV / (1 + r)Y Question A: For interrogative sentence A the motility declared that the bank account will be cost $15,000.00 in one grade. The interest rate ( usher out 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 suspicion B it say that there were two bank accounts, consider A and sexual conquest B. Account A will be worth(predicate) $6,500.00 in one year. Account B will be worth $12,600.00 in two years. both(prenominal) 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 progress to three years worth of gold deposit. Here is how much(prenominal) income this gold mine is project to land you each year for the next...

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