Pavlína Haltofová; CASE STUDIES IN FINANCIAL MANAGEMENT
ENCLOSURE NO. 1 - FORMULAE
Future value
FV = C0(í + i)n
Future value of cash flows
FV = C0 (1 + 0" +C1(l + i)"-1 + C2 (1 + i)n~2 +... + C„_! (1 + i) + C„
Present value
PV = -
(1+/)"
Present value of cash flows
PV = cn+— + ——
1+i   (1 + 0
■+...+-
(1+0"
Discount factor
(P/C„,r,n):
(1 + 0"
FVofan ordinary annuity    PV of an ordinary annuity
FV = A
(1 + 0"-1
(1 + 0"-l
i(i+0"
Annuity from FV
A = FV-
(1+0"-l
Annuity from PV
A = PV
(1 + 0"J
(1 + 0"-l
FV of a growing annuity
FV = A
(1+0" -(l+s)"
PVofa growing annuity
PV = A-
1
1-
d+g)" d+0"
PV of an ordinary perpetuity
pv = c
Present value of a growing perpetuity
PV
FV with multiple compounding     Effective annual interest rate
Fv=c0a+-r
m
		m
EAIR =		-i
	m	
FV, continuous compounding       PV, continuous compounding
FV = C0(em)
PV = Cn(e-'n)
Real cashflow       Nominal interest rate   Real interest rate
C=-
(1 + *)"
i = (l + r)(l + *)-l
(1 + x)
105-
Pavlína Haltofová; CASE STUDIES IN FINANCIAL MANAGEMENT Net present value
EC, -r-V {l+if
Internal rate of return
Profitability Index Method
pj _ PV project
'0
Expected rate of profit Variance
n * = I '	
i = 1	
i=l
Variation coefficient
	a
	CV= —
	R
Expected rate of portfolio profit    Variance of portfolio
Rp=XRA+(l-X)RE
crp2 = XV/ + (1-X)VB2 +2X(l-X)cow(RA,RB)
Covariance
li
cov(RA,RB ) = ^Pi(RiA- RA)(RiB - RB)
i=l
cov{RA,RB) = kAB(JAaB
Correlation coefficient
^AB -
cov(RA,RB)
<*A°B
-106-