Help with finance question

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Rex79

Rex79

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I'm studying for my Comptabilite de management exam and there is one chapter that is specifically finance questions.
My finance class is quite far away and I'm having some trouble...
Heres a pretty simple(I think) question:

Si les rentrees de fonds augmentent de 1500$ la premiere annee, 2100$ la 2e annee et 3200 la 3e annee et que le taux de rendement exige est de 10%, combien serait-il dispose a payer (aujourdhui) pour le nouvel equipement?

A) 6800
B) 5502 (which is the answer)
C) 6052
D) 6120

I cant remember the formula to use!!!
Thanks:)
 
My management accounting classes only required the use of multipliers : no formulas. All exams included a sheet of present values for single payments and annuities.

Your question is solved by looking up the multiplier for each period using a 10% discount rate. According to the table I found:

period multiplier @10%
1 .91
2 .83
3 .75

so 1500(.91)+2100(.83)+3200(.75)=5508
 
btw, the present value of future cash flows less the initial investment yields the NPV, if that comes up. If the NPV is positive, then the investment should be made.
 
nobody said:
My management accounting classes only required the use of multipliers : no formulas. All exams included a sheet of present values for single payments and annuities.

Your question is solved by looking up the multiplier for each period using a 10% discount rate. According to the table I found:

period multiplier @10%
1 .91
2 .83
3 .75

so 1500(.91)+2100(.83)+3200(.75)=5508
Click to expand...

sweet thanks!! I found the table! What is weird is that I was doing an old exam and there wasnt any tables with the exam.... maybe they just didn't add it!
thanks again!
 
nobody said:
My management accounting classes only required the use of multipliers : no formulas. All exams included a sheet of present values for single payments and annuities.

Your question is solved by looking up the multiplier for each period using a 10% discount rate. According to the table I found:

period multiplier @10%
1 .91
2 .83
3 .75

so 1500(.91)+2100(.83)+3200(.75)=5508
Click to expand...

Another way is to do the PV of the cash flow for the answer.

You have to do the PV of all cash flow and the discount rate is 10%. Multiplier = 1/(discount rate)^payment period

PV = 1500/1.10 + 2100/(1.10)^2 + 3200/(1.10)^3
 
m_1313 said:
Another way is to do the PV of the cash flow for the answer.

You have to do the PV of all cash flow and the discount rate is 10%. Multiplier = 1/(discount rate)^payment period

PV = 1500/1.10 + 2100/(1.10)^2 + 3200/(1.10)^3
Click to expand...

yea I used that afterwards...!
 
m_1313 said:
Another way is to do the PV of the cash flow for the answer.

You have to do the PV of all cash flow and the discount rate is 10%. Multiplier = 1/(discount rate)^payment period

PV = 1500/1.10 + 2100/(1.10)^2 + 3200/(1.10)^3
Click to expand...


yup.

It's the same thing though. At JMSB they give us the multipliers instead of using the formula (i.e. doing it properly). The OP should check what is expected at his school.
 
nobody said:
yup.

It's the same thing though. At JMSB they give us the multipliers instead of using the formula (i.e. doing it properly). The OP should check what is expected at his school.
Click to expand...

I went to JMSB and I was taught to use the formula...
 
WhiteIvory said:
I went to JMSB and I was taught to use the formula...
Click to expand...


In an accounting class? I learned it in Comm 308, but I'm pretty sure we didn't use it in undergrad managerial acccounting, and I just finished a graduate managerial accounting class and we didn't use the formula.
 
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