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PVIF Table
FVIF Table
Perpetuity
is when the same cash flow C is
Perpetuity
Growing Perpetuity
the cash flows paid out every year grow at
When
PV of Annuity
the same cash flow C is paid out for n
When
years
PVIFA Table
Alternatively, the PVIFA table can
also be used to calculate the PV of an
annuity
FVIFA Table
To calculate future value of an
annuity, you can use the FVIFA table
2-14
Factory costs 800,000
Produces 170,000 for 10 years
Find
A. Its NPV if r = 14%
(86,739.66)
2-25
If r= 8%, what amount needs to be set
aside for
A perpetuity of 1 bn
12.5 bn
Perpetuity of 1 bn growing at 4%
25 bn
1 bn for 20 yrs
9.82 bn
2-34
Couple retires in 3 yrs
Needs 15k per month, gets 9k from
other sources
Has a fund of 1,000,000
Fund grows at 3.5%
For how many years can withdrawals
be made?
21.38 yrs
2-39
Pipeline generates 2 mn in year 1
Cash flows declining by 4% p.a.
If r= 10%, find: PV of pipeline if cash flows continue forever
14.29 mn
Growing Annuity
the cash flows paid out every year grow at
When
CF
-55
60
80
-85
Year
CF
-55
60
80
-85
Amount invested at
year 3
-1.60
78.21
1.0288