Application of the Time Value of Money

Instructions

1. In your textbook. Fundamentals of Corporate Finance, review:
   1. Chapters 5, “Introduction to Valuation: The Time Value of Money”
   2. Chapter 6, “Discounted Cash Flow Valuation”
2. Review the PowerPoint files Chapter 5- Introduction to Valuation: The Time Value of Money(calculator).ppt, Chapter 5- Introduction to Valuation: The Time Value of Money(formulas).ppt, and Chapter 6 – Discounted Cash Flow Valuation.ppt to help you further understand the chapters.
3. Using Excel, complete the following problems in the textbook:

1. Single Sum: Problems 2, 3, 4, and 5 on pages 146 and 147
2. Series of Cash Flows: Problems 1-3 on pages 183 and 184, and Problem 36 on page 187
3. Annuities and Perpetuities: Problems 6, 10, and 11 on page 184
4. Amortization: Problem 20 on page 185 and Problem 55 on page 189