Exam 3 (All Equations) Flashcards
1
Q
Future value (FV)
A
Future value = $1 × (1 + r)t
2
Q
Present value of a single sum (PVSS)
A
PVSS = FVSS/(1+r)^t
3
Q
Most important ratio where all ratios can be derived from it
A
Future value of a single sum (FVSS)
4
Q
Future value of a single sum (FVSS)
A
FVSS = PV(1+r)^t
5
Q
Future value interest factor (FVIF)
A
FVIF = (1+r)^t
6
Q
EAR
A
EAR = (1+ PR)^T-1
7
Q
Perpetuity PV
A
Perpetuity PV= C/r
8
Q
What does C equal
A
cash amount
9
Q
What does t equal
A
number of periods
10
Q
Total compensation that investor requires
A
Risk-free rate + Credit risk = total compensation that investor requires
