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Text File | 1994-08-17 | 15KB | 286 lines

Financial formulas: Thi≤ men⌡ contain≤ financia∞ formulas¼ sucΦ a≤ Futurσ Value¼ Payments¼ ì Presen⌠ Value¼ NPV¼ anΣ IRR. Iε ordinar∙ annuities¼ thσ payment≤ occu≥ a⌠ thσ enΣ oµ eacΦ period« Iε ì annuitie≤ due¼ thσ paymen⌠ occur≤ a⌠ thσ beginninτ oµ eacΦ period. Withiε thesσ formulß wheneve≥ annuit∙ calculation≤ arσ made¼ the∙ arσ donσ s∩ ì a≤ ordinar∙ annuities¼ no⌠ annuitie≤ due. ============== | OPTION 1: | ============== 1) Future Value Thi≤ selectioε calculate≤ thσ Futurσ Valuσ oµ aε ordinar∙ annuity« I⌠ ì require≤ tha⌠ yo⌡ ente≥ thσ Payment¼ Rate¼ anΣ Period« ============== ⁿ OPTIO╬ 2║ | ============== 2⌐ Payment: Thi≤ selectioε calculate≤ ß Loaε paymen⌠ amount« Yo⌡ ente≥ Principle¼ Rate¼ ì anΣ Period« ============== ⁿ OPTIO╬ 3║ | ============== 3⌐ Presen⌠ Value║ Thi≤ selectioε calculate≤ thσ Presen⌠ Valuσ oµ aε ordinar∙ annuity« I⌠ ì require≤ tha⌠ yo⌡ ente≥ thσ Payment¼ Rate¼ anΣ Period« ============== ⁿ OPTIO╬ 4║ | ============== 4⌐ Conver⌠ AP╥ t∩ AER: èThi≤ selectioε wil∞ conver⌠ aε Annua∞ Percentagσ o≥ Nomina∞ Interes⌠ Ratσ t∩ ì aε Annua∞ Effectivσ Rate. ============== ⁿ OPTIO╬ 5║ | ============== 5⌐ NPV║ Thi≤ selectioε assesse≤ Ne⌠ Presen⌠ Value« I⌠ request≤ thσ initia∞ casΦ ì outflow¼ ß serie≤ oµ equa∞ casΦ inflows¼ ß fina∞ casΦ inflow¼ thσ period≤ iε ì thσ project¼ anΣ ß hurdlσ rate¼ 'i'« Oncσ selected¼ optioε ╡ displays: ==========================================================================╜ | Initia∞ casΦ outflow║ 0.0░ | Valuσ oµ equa∞ casΦ inflows║ 0.0░ Fina∞ casΦ inflow║ 0.0░ Period≤ iε project║ ░ Hurdle rate, as a decimal: 0.0000 | | =========================================================================== /--------------------------\ | Note on | | using Net Present Value | \--------------------------/ AlthougΦ intendeΣ t∩ havσ ß specifiπ applicatioε iε solvinτ NP╓ questions¼ ì thi≤ financia∞ mode∞ caε als∩ bσ useΣ fo≥ othe≥ purposes« Iµ yo⌡ leavσ ì 'Initia∞ casΦ outflowº blanδ whilσ filinτ iε thσ othe≥ fou≥ entries¼ theε i⌠ ì wil∞ producσ aε accuratσ solutioε fo≥ ß Presen⌠ Valuσ Annuit∙ witΦ aε Endinτ ì Balloon. Onσ specifiπ examplσ i≤ iµ aε oi∞ compan∙ offer≤ t∩ bu∙ lanΣ froφ you« Let'≤ ì sa∙ tha⌠ the∙ proposσ t∩ pa∙ 12░ monthl∙ payment≤ oµ $5,00░ witΦ ß ballooε ì paymen⌠ oµ $150,00░ iε additioε t∩ thσ las⌠ payment¼ a⌠ aε annua∞ ratσ oµ ì 18%« Yo⌡ woulΣ firs⌠ conver⌠ 18Ñ t∩ thσ monthl∙ equivalen⌠ oµ (18/12⌐ o≥ ì 1.5¼ theε ente≥ tha⌠ a≤ ß decima∞ int∩ thi≤ model: ==========================================================================╜ Initial cash outflow: 0.00 <=== Leave blank | | Value of equal cash inflows: 5000.00 Final cash inflow: 150000.00 è Periods in project: 120 Hurdle rate, as a decimal: 0.0150 Present value of Cash inflows [ordinary annuity]: 277,492 Present value of Final cash inflow: 25,128 | Net Present Value: 302,621 | =========================================================================== $302,621 is the Present Value for an ordinary annuity with an Ending Balloon. ============== | OPTION 6: | ============== 6) IRR: Thi≤ selectioε show≤ Interna∞ Ratσ oµ Return« I⌠ request≤ thσ initia∞ casΦ ì outflow¼ ß serie≤ oµ equa∞ casΦ inflows¼ ß fina∞ casΦ inflow¼ thσ period≤ iε ì thσ project¼ anΣ ß hurdlσ rate¼ 'i'« Oncσ selected¼ optioε ╢ requests: =========================================================================== | Initial cash outflow: 0.00 | Value of equal cash inflows: 0.00 Final cash inflow: 0.00 Periods in project: 0 | | =========================================================================== ============== | OPTION 7: | ============== 7) Interest Thi≤ selectioε find≤ thσ tota∞ interes⌠ paiΣ iε ß loan« I⌠ request≤ ì Principle¼ Rate¼ anΣ Period« è ============== | OPTION 8: | ============== 8) Principle Thi≤ selectioε determine≤ thσ Principlσ stil∞ oweΣ iε ß loan« I⌠ ask≤ fo≥ ì Curren⌠ payment¼ Rate¼ PerioΣ oµ loan¼ anΣ numbe≥ oµ payment≤ alread∙ made« ============== ⁿ OPTIO╬ 9║ | ============== 9⌐ Leasσ Thi≤ optioε compute≤ ß leasσ payment« I⌠ request≤ thσ cos⌠ oµ thσ asse⌠ o≥ ì valuσ (PV⌐ ¼ interes⌠ rate¼ perioΣ oµ loan¼ anΣ residua∞ value¼ iµ any« ì Interes⌠ ratσ i≤ expresseΣ a≤ ß decima∞ pe≥ paymen⌠ period« /--------------------------▄ | Verify output | | with Net Present Value | \--------------------------/ T∩ verif∙ thσ outpu⌠ froφ thi≤ option¼ takσ thσ leasσ paymen⌠ i⌠ calculate≤ ì anΣ placσ i⌠ int∩ optioε 5¼ NPV¼ alonτ witΦ thosσ component≤ froφ optioε ì ninσ tha⌠ resulteΣ iε i⌠ creatinτ thσ leasσ payment« Iε selectioε 5¼ thσ leasσ paymen⌠ i≤ thσ missinτ portioε that¼ oncσ entered¼ ì wil∞ creatσ aε NP╓ oµ zero. Let'≤ sa∙ tha⌠ yo⌡ wisΦ t∩ leasσ ß machinσ witΦ ß curren⌠ marke⌠ valuσ oµ ì $130,00░ fo≥ threσ years« A⌠ thσ enΣ oµ thi≤ time¼ thσ machine'≤ marke⌠ ì valuσ shoulΣ bσ $90,000« T∩ earε aε annua∞ returε ratσ oµ 24Ñ compoundeΣ ì monthly¼ wha⌠ shoulΣ bσ thσ monthl∙ payment┐ First¼ conver⌠ thσ percentagσ t∩ thσ monthl∙ equivalent¼ o≥ %▓ (2┤ » 12)¼ ì theε ente≥ thσ followinτ value≤ int∩ optioε 9: ==========================================================================╜ | Cost of asset: 130000.00 | Rate, as a decimal: 0.0200 è Period of loan: 36 Residual value, if any: 90000.00 Lease payment [ordinary annuity]: 3,369.31 | | =========================================================================== Observσ tha⌠ i⌠ calculate≤ thσ leasσ paymen⌠ oµ 3,369.3▒ afte≥ yo⌡ havσ ì entereΣ thσ othe≥ values. Oncσ completed¼ g∩ t∩ optioε ╡ anΣ inser⌠ thesσ values║ ==========================================================================╜ | Initial cash outflow: 130000.00 | Value of equal cash inflows: 3369.31 Final cash inflow: 90000.00 Periods in project: 36 Hurdle rate, as a decimal: 0.0200 Present value of Cash inflows [ordinary annuity]: 85,880 Present value of Final cash inflow: 44,120 Net Present Value: -0 | | =========================================================================== Thσ Ne⌠ Presen⌠ Valuσ oµ '0º verifie≤ thσ accurac∙ oµ it≤ input. ============== ⁿ OPTIO╬ A║ | ============== A⌐ Days This option finds the number of days between any two dates. è ============== ⁿ OPTIO╬ B║ | ============== B⌐ Rate of Return, no dividends or coupon. This selection assesses Rate of Return with a zero coupon or payment. It requests the initial purchase price, the selling price, and the periods in the project.