会计学FinancialGoaloftheFirmAgencyproblemAgencyCostsFinancialDecisionsandRisk-returnRelationshipsRiskandReturnsWhyPricesReflectValueOrganisationalFormsNatureoftheorganisationalformsComparisonofOrganisationalformsTheflowoffundsTypesofsecuritiesBroking&investmentbankingComponentsoffinancialmarketsPrimaryandsecondarymarketsCapital&moneymarketsReviewsEndofChapter1Chapter4:MathematicsofFinanceTheTimeValueofMoneyWeknowthatreceiving$1todayisworthmorethan$1inthefuture.ThisisduetoOPPORTUNITYCOSTS.Theopportunitycostofreceiving$1inthefutureistheinterestwecouldhaveearnedifwehadreceivedthe$1sooner.wecanMEASUREthisopportunitycostby:Note:FutureValueFutureValue-singlesumsIfyoudeposit$100inanaccountearning6%,howmuchwouldyouhaveintheaccountafter1year?FutureValue-singlesumsIfyoudeposit$100inanaccountearning6%,howmuchwouldyouhaveintheaccountafter2year?FutureValue-singlesumsIfyoudeposit$100inanaccountearning6%,howmuchwouldyouhaveintheaccountafter3year?FutureValue-singlesumsIfyoudeposit$100inanaccountearning6%,howmuchwouldyouhaveintheaccountafter4year?FutureValue-singlesumsIfyoudeposit$100inanaccountearning6%,howmuchwouldyouhaveintheaccountafter5years?FutureValue-singlesumsIfyoudeposit$100inanaccountearningi,howmuchwouldyouhaveintheaccountafternyears?FutureValue-singlesumsIfyoudeposit$100inanaccountearning6%withquarterlycompounding,howmuchwouldyouhaveintheaccountafter5years?PresentValuePresentValue-singlesumsIfyouwillreceive$1005yearsfromnow,whatisthePVofthat$100ifyouropportunitycostis6%?05MathematicalSolution:PV=FV(PVIFi,n)5,000=11,933(PVIF?,5)PV=FV/(1+i)n5,000=11,933/(1+i)5.419=((1/(1+i)5)2.3866=(1+i)5(2.3866)1/5=(1+i)i=0.19TheTimeValueofMoneyAnnuitiesExamplesofAnnuities:FutureValue-annuityIfyouinvest$1,000attheendofthenext3years,at8%,howmuchwouldyouhaveafter3years?MathematicalSolution:FV=PMT(FVIFAi,n)FV=1,000(FVIFA.08,3)(useFVIFAtable,or)FV=PMT(1+i)n-1iFV=1,000(1.08)3-1=$3246.400.08PresentValue-annuityWhatisthePVof$1,000attheendofeachofthenext3years,iftheopport