ADM 2350 Lecture Notes - Lecture 1: Creative Commons License, Dividend Discount Model, Weighted Arithmetic Mean

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30 Mar 2015
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Present value interest factor (with at time n): For ordinary annuity, i. e. , the first at time 1 and the last at time n, For annuity due, i. e. , the first at time 0 and the last at time n-1, Fv of annuity due = (1+r) fvifa(r, n) Pv of annuity due = (1+r) pvifa (r, n) For cash flow (cf) that differs from , multiply the cf by the respective interest factor. For examples, the pv of ordinary annuity is equal to pvifa(r, n); and the pv of annuity due is (1+r) pvifa(r, n). Future value of uneven or irregular cash flows: Present value of uneven or irregular cash flows: In the above formulas, r is the interest rate per period, n is the number of periods, where the length of a period depends on the question.

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