 |  Fundamentals of Corporate Finance, 4/e Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
Discounted Cash Flow Valuation
Learning ObjectivesAfter studying this chapter in the textbook, you should be able to:
| Define and give examples of an ordinary annuity. |
| | | | Compute the present and future values of an ordinary annuity. |
| | | | Define a perpetuity and compute its present value. |
| | | | Compute the number of payments given the size of the payment and the present and future value of the payments. |
| | | | Calculate the interest rate implied by the present value, future value and a series of payments. |
| | | | Explain the difference between an ordinary annuity and an annuity due. |
| | | | Compute the present and future values for an annuity due. |
| | | | Compute the present value of a growing perpetuity. |
| | | | Compute the present value of a growing annuity. |
| | | | Distinguish between the effective annual rate (EAR) and the annual percentage rate (APR). |
| | | | Determine the fixed payment required for a Canadian mortgage. |
| | | | Compute the EAR with continuous compounding. |
| | | | Explain the difference between a discount loan, an interest only loan and an amortized loan. |
| | | | Prepare an amortization table for a Canadian mortgage. |
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2002 McGraw-Hill Higher Education