Principles of
Chapter 2 Corporate Finance
Tenth Edition
How to Calculate
Present Values
Slides by
Matthew Will
McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
2-2
Key terms
• Present value: Giá trị hiện tại
• Future value: Giá trị tương lai
• Discount factor: Nhân tố chiết khấu
• Annuity: Hàng năm
• Perpetuities: Vĩnh viễn
• Compound: Ghép
• Simple interest : lãi đơn
• Compound interest: lãi kép
• Rate of return: Tỷ suất sinh lời
• Cash flow: dòng tiền
• EAR (Effective Annual Rate): tỷ suất sinh lợi hiệu dụng năm.
• APR (Annual Percentage Rate): Lãi suất năm
2-3
Topics Covered
Single payment cashflow
1 (Dòng tiền độc than)
Multiple payment cashflows and NPV
2 (Dòng tiền có nhiều bồ)
Annuity and Perpetuity
3 Growth Annuity and Growth Perpetuity
Discount Factor
4 APR and EAR
2-4
Present and Future Value
Future Value
Amount to which
an investment will
grow after earning
Present Value interest
Value today of
a future cash
flow.
Present Values & Future Values 2-5
Definition
• Present Value is defined as future cash flows discounted to the
present at an appropriate discount rate.
• PV (x + y) = PV (x) + PV (y)
• The rate of return is also called: I) discount rate; II) hurdle rate;
III) opportunity cost of capital
• The present value formula for one period cash flow is PV =
C1/(1 + r)
• The concept of compound interest is most appropriately
described as interest earned on interest.
• The process of discounting is the inverse of the process of
compounding.
Dòng tiền độc thân 2-6
1 năm
PV: Present value
C1: Future value one year
r: discount rate per year
Dòng tiền độc thân 2-7
n năm
PV: Present value
C1: Future value one year
r: discount rate per year
n: number of year
2-8
Dòng tiền độc thân khi có kỳ hạn ghép lãi
PV: Present value
C1: Future value one year
r: discount rate per year / APR
n: number of year
m: 365 (daily), 12 (monthly), 4 (quarterly), 2 (semi-annually)
2-9
Dòng tiền có nhiều bồ
PV: Present value
Cn: Future value n year
r: discount rate per year
n: number of year
2-10
Net Present Value
NPV: Net Present value
Co < 0: Initial investment
Cn: Future value n year
r: discount rate per year
n: number of year
Net Present Value rule 2-11
Definition
• The net present value formula for one period is:
• NPV = C0 + [C1/(1 + r)]
• NPV = PV required investment
• NPV rule and the rate of return rule:
• Accept a project if its NPV > 0
• Reject a project if the NPV < 0
• Accept a project if its rate of return > opportunity cost of
capital
• The opportunity cost of capital for a risky project is the expected
rate of return on a portfolio of securities of similar risks as the
project.
• The discount rate is used for calculating the NPV is determined by
the financial markets.
• The managers of a firm can maximize stockholder wealth by
taking all projects with positive NPVs
2-12
Thảo luận nhóm
Các nhóm thảo luận và thực hành 5 bước lập kế hoạch tài
chính cá nhân như sau:
B1: Xác định độ tuổi về hưu mà bạn mong muốn?
B2: Năm nay bạn bao nhiêu tuổi? Bạn còn bao nhiêu năm để
nghỉ hưu?
B3: Xác định số tiền trung bình bạn chi trong mỗi tháng? Ví
dụ chi tiền trong năm 2022). Từ các khoản chi này, bạn hãy
phân ra đâu là: Chi tiêu cần thiết? Học phí? Vui chơi? Đầu tư?
Tiết kiệm? Từ thiện?
B4: Xác định tỷ trọng bạn chi cho từng danh mục?
B5: Thu nhập của bạn dự kiến trong thời gian tới là bao
nhiêu? Liệt kê tối thiểu 5 thu nhập. Đơn vị tính: triệu đồng /
tháng
2-13
Annuity
Annuity - An asset that pays a fixed sum each year for a specified
number of years.
2-14
Perpetuity
Perpetuity - Financial concept in which a cash flow is
theoretically received forever.
2-15
Growth Annuity
Growth annuity - An asset that pays a fixed growth rate cashflow
each year for a specified number of years.
2-16
Growth Perpetuity
Growth perpetuity - An asset that pays a fixed growth rate
cashflow each year forever.
2-17
Discount Factor
r: discount rate per year
n: number of year
2-18
Annual percentage rate
Simple interest (Lãi suất đơn)
Compounded interest (Lãi suất kép)
2-19
Effective interest rate
Cho EAR, kêu tính Nominal rate:
Cho Nominal rate compounded m, kêu tính
EAR:
2-20
Effective interest rate
Cho Nominal rate compounded
continuously, kêu tính EAR:
Cho Nominal rate per m (VD: 1% / tháng),
kêu tính APR
APR = Nominal rate × m
Review Chapter 2 2-21
PV, FV definition
• Present Value is defined as future cash flows discounted to the
present at an appropriate discount rate.
• PV (x + y) = PV (x) + PV (y)
• The rate of return (r) is also called: I) discount rate; II) hurdle
rate; III) opportunity cost of capital
• The present value formula for one period cash flow is PV =
C1/(1 + r)
• The concept of compound interest is most appropriately
described as interest earned on interest.
• The process of discounting is the inverse of the process of
compounding.
Review Chapter 2 2-22
Net Present Value rule
• The net present value formula for one period is:
• NPV = C0 + [C1/(1 + r)]
• NPV = PV required investment
• NPV rule and the rate of return rule:
• Accept a project if its NPV > 0
• Reject a project if the NPV < 0
• Accept a project if its rate of return > opportunity cost of
capital
• The opportunity cost of capital for a risky project is the expected
rate of return on a portfolio of securities of similar risks as the
project.
• The discount rate is used for calculating the NPV is determined by
the financial markets.
• The managers of a firm can maximize stockholder wealth by
taking all projects with positive NPVs
2-23
Review Chapter 2
Công thức tổng quát:
Ứng dụng thực tế:
PV: Present value
Cn: Future value n year NPV: Net Present value
r: discount rate per year Co < 0: Initial investment
n: number of year
2-24
Review Chapter 2
m: số kỳ ghép lãi trong năm
PV: Present value
Cn: Future value n year
n: number of year
r: discount rate per year, rate of return, interest rate, cost of capital, APR (Annual
percentage rate)
EAR (Effective annual rate): lãi suất hiệu dụng năm
2-25
Review Chapter 2
PV: Present value at beginning of year 0
FV: Future value at the end of year n
C: Cash flow at the end of each year
r: discount rate per year
n: number of year
2-26
Review Chapter 2
n – year discount factor n – year annuity discount factor
Discount factor PV n – year annuity factor FV n – year annuity factor
(DF) (PVAF) (FVAF)
DF: nhân tố chiết khấu của dòng tiền chỉ có phát sinh C0, để tính PV
PVAF: nhân tố chiết khấu của dòng tiền annuity, để tính PV
FVAF: nhân tố chiết khấu của dòng tiền annuity, để tính FV
2-27
Review Chapter 2
PV: Present value at beginning of year 0
FV: Future value at the end of year n
C: Cash flow at the end of each year
r: discount rate per year
n: number of year
g: growth rate (r > g)
2-28
Web Resources
Click to access web sites
Internet connection required
www.smartmoney.com
http://finance.yahoo.com
www.in.gov/ifa/files/TollRoadFinancialAnalysis.pdf
www.mhhe.com/bma
