1 / 14

Calculating Present Value: Understanding Financial Returns

Explore the concept of present value, showing how years until cash receipt and interest rates impact investments. Learn through examples like the $1,000 worth $747 today with a 6% interest rate. Discover how it applies to IT costs' returns in each year, such as a 5-year investment costing $235,450,000.

gpalmer
Download Presentation

Calculating Present Value: Understanding Financial Returns

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Calculation of Present Value Farrokh Alemi, Ph.D.

  2. Present Value

  3. “Show Me the Cash” Years before receiving the cash Interest rateor opportunity cost of investment

  4. Example of Present Value Interest rate Years till return If we assume a 6% interest rate, receiving $1,000 in 5 Years is worth $747 today.

  5. Present Value of IT Costs Assume 6% Interest Rate or 0.06

  6. Present Value of IT Costs Shows returns in each year

  7. Present Value of IT Costs

  8. Present Value of IT Costs

  9. Present Value of IT Costs

  10. Present Value of IT Costs

  11. Present Value of IT Costs

  12. Present Value of IT Costs

  13. Present Value of IT Costs

  14. Present Value of IT Costs Present Value of 5-year Cost of Investment $235,450,000

More Related