Present and Future Values, and Expected Returns
We examined two important topics in finance this week: (a) present and future values and (b) security valuation.
Critically reflect on the importance of present and future values. What factors must be considered when calculating present and future values? What other qualitative factors play into present and future value decisions? Perhaps you have opportunities in your professional life to use present and future values. What are some real or potential applications of these concepts?
We also looked at expected returns. Why do bond values go down when interest rates go up? Is this true in the opposite direction?
Second Assignment
You have been asked by a manager in your organization to put together a training program explaining Net Present Value (NPV) and Future Value (FV) and how they are used to evaluate the price of stock. You have been given the following objectives:
Upon completing your Net Present Value (NPV) and Future Value (FV) Training Program, employees should be able to do the following:
- Explain NPV and FV.
- Describe the factors that are used in the NPV and the FV formulas.
- Give an example of how to use the formulas for NPV and FV for a stock purchase.
- Summarize the differences between the two formulas and the purpose of using each.
Develop a 10- to 12-slide PowerPoint Presentation (excluding title slide and reference slide) that cover each of the above topics. In the slide notes, include your explanations for each topic above.