FE Exam Formulas Ch. 3 Flashcards
1
Q
Purpose and Variables of…
A
Discount Factor
i=interest
n=years
2
Q
Purpose and Variables of…
A
Non Annual Compounding
ie=interest
r=nominal annual interest
m=the compound period
r/m=the period rate
3
Q
Purpose and Variables of…
A
Inflation Adjusted Interest Rate
i=interest
f=inflation rate
4
Q
Purpose and Variables of…
A
Present Value of an Infinite Series
A=given value
i=interest rate
5
Q
Purpose and Variables of…
A
Cost-Benefit Analysis
B=benefit
C=Cost
6
Q
Purpose and Variables of…
A
Expected Value Formula
C1=cost 1
C2=cost 2
p1/p2=probability of possible costs/revenues
7
Q
Purpose and Variables of…
A
Straight Line Depreciation
Dj=Depreciation in year j
C=Initial Cost
Sn=Expected Salvage Value
n=expected life of asset
8
Q
Purpose and Variables of…
A
Depreciation Value
C=initial cost
9
Q
Purpose of…
A
Book Value
