Samenvatting Inleiding tot Financiën! (alle WPO's)

[Year]




SALY16/STUVIA

,PROBLEM SETS 1

THE NPV CONCEPT
PV of securities
NPV VERSUS OTHER CRITERIA


PROBLEM SETS 2

INVESTMENT DECISIONS AND NPV
CASHFLOW CONCEPT


THEORY HANDOUTS




1

, FINANCIAL MANAGEMENT: PROBLEM SET 1

THE NPV CONCEPT
1. Calculate the NPV and the rate of return for each of the following investments. The opportunity cost of
capital is 20%.

Investment C0 C1
1 –10,000 +20,000
2 –5,000 +12,000
3 –5,000 +5,500
4 –2,000 +5,000
Which investment is most valuable?
𝐶1 𝐶1−𝐶0 𝑤𝑖𝑛𝑠𝑡
NPV Concept {C0 + 1+𝑟
} Rate of Return { = 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑟𝑖𝑛𝑔}
𝐶0

1. NPV = –10 000 + 20 000 . DF120 1.
𝐶1−𝐶0
=
20 000−10 000
= 100%
= 10 000 + 20 000 x 0,833 (tA) = 6667 𝐶0 10 000

𝐶1 20 000
of C0 + = -10 000 + = 6667
1+𝑟 1+0,20 𝐶1−𝐶0 12 000−5000
2. = = 140%
2. NPV = −5000 + 12 000 x 0,833 = 4996 𝐶0 5000

12 000
of 10 000 + = 6667
1,20 𝐶1−𝐶0 5500−5000
3. = = 10%
3. NPV = −5000 + 5500 x 0,833 = –417 𝐶0 5500

5500
of –5000 + = –417
1,20 𝐶1−𝐶0 5000−2000
4.
𝐶0
= 2000
= 150%
4. NPV = −2000 + 5000 x 0,833 = 2165
5000
of –2000 + = 2165
1,20


Meest waardevolle investering = maximum NVP = investering 1 (Niet de hoogste RoR)
Alle projecten met een positieve NPV zijn waardevol (1,2,4)

NPV CALCULATION

1. Use the present value tables to calculate the PV of € 100 received in:
1
PV= 𝑥 𝐶1
1+𝑟


a) Year 10 (at a discount rate of 1 percent)
PV0 = DF10 x C1 = 0,9053 x 100 = 90,53 DF10 =
1
(1+0,01) ^10

b) Year 10 (at a discount rate of 13 percent)
TABEL A
PV0 = DF10 x C1 = 0,2946 x 100 = 29,46

c) Year 10 (at a discount rate of 13 percent)
PV0 = DF15 x C1 = 0,0649 x 100 = 6,49

d) Each of years 1 through 3
(at a discount rate of 12 percent). TABEL B
1 1 1
AF3 x R = 2,402 x 100 = 240,20 AF3 = +
(1+0,12) ^1 (1+0,12) ^2 (1+0,12) ^3




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