present value tables

present value tables

tables which are used in INVESTMENT APPRAISAL undertaken by means of DISCOUNTED CASH FLOW. The tables show how much we need to invest now, at a certain rate of interest and for a particular period of time, to produce £1. For example, the tables show that if we want to produce £1 in 5 years' time at 10%, we will need to invest £0.621 now. Alternatively, the tables show that £1 receivable in 5 years' time, taking into account a rate of interest 10%, will be worth only 62p (that is, £0.621).
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The casebook includes present value tables (useful in determining a worker's lost income or the present value of the income produced by a capital asset), and tables of cases, statutes/rules/treaties/etc.
The question states that the company's post-tax cost of capital is 8 per cent, so you can look up the present value tables and obtain the discount factors for years one to four at a discount rate of 8 per cent (see line 11 of table 3).
Present value tables are also available for calculations.
Wellington's second edition included a number of present value tables (present value of $1, present value of an annuity, and compound interest tables), as well as concise explanations and examples of applying "discounted expectancies" to railroad capital budgeting in a chapter on "Probable Volume of Traffic and Law of Growth.
39) In 1946 Gregory published an extensive set of present value tables with working instructions titled, "Interest Rate Tables for Determining Rate of Return on Profit Projects.
In Capital Budgeting, however, Dean recommended using DCF analysis only when cash flows are uneven and the required earnings rate is high; otherwise, Dean felt that the average rate of return method was satisfactory for evaluating most capital projects, so he did not even include present value tables in his book.
The diffusion of discounted cash flow concepts by business school academics in the 1950s was aided by the publication of extensive present value tables calculated by electronic computers.
60)Charles Christenson, "Construction of Present Value Tables for Use in Evaluating Capital Investment Opportunities," Accounting Review 30 (Oct.
The book avoids stochastic calculus in favor of numeric cash flow calculations, present value tables, and diagrams, explaining options, swaps and credit derivatives without any use of differential equations.
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