TAILIEUCHUNG - Issues in Financial Accounting (25)

PART II: Corporate Accounting Concepts and . Issues Lecture 25. Accounting and Learning. Learning Objectives. Objectives. 1. Solve future value of ordinary and annuity due problems 2. Solve present value of ordinary and annuity due problems 3. Solve present value problems related to deferred annuities and. bonds 4. Apply expected cash flows to present value measurement2 Accounting. Accounting and. and the. the Time. Time Value. Value of. of Money. Money. More Present. Annuities Complex Value. Situations Measurement Future value Deferred Choosing an. of ordinary annuities appropriate. annuity Valuation of interest rate. Future value long-term Example of. of annuity due bonds expected cash. Examples of Effective- flow. FV of annuity interest. Present value method of. of ordinary bond discount/. annuity premium. amortization. Present value. of annuity due. Examples . PV of annuity Basic. Basic Annuities. Annuities. An annuity is a series. of equal periodic . payments. Period 1 Period 2 Period 3 Period 4 $10,000 $10,000 $10,000 $10, Annuities. Annuities Annuity requires: (1) Periodic payments or receipts (called rents) of the. same amount, (2) Same-length interval between such rents, and (3) Compounding of interest once each interval Two Ordinary Annuity - rents occur at the end of each period Types Annuity Due - rents occur at the beginning of each LO 1 Solve future value of ordinary and annuity due problems. Annuities. Annuities Future Value of an Ordinary Annuity. Rents occur at the end of each period No interest during 1st period Present Value Future Value $20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 0 1 2 3 4 5 6 7 86 LO 1 Solve future value of ordinary and annuity due problems. Future. Future Value. Value of. of an. an Ordinary. Ordinary Annuity. Annuity Illustration: Assume that $1 is deposited at the end of each. of 5 years (an ordinary annuity) and earns 12% interest. compounded annually. Following is the computation of the. future value, using the “future value of 1” table (Table 6-1) for. each of the five $1 rents7 LO 1 Solve future value of ordinary and annuity due problems. Future. Future Value. Value of. of an. an Ordinary. Ordinary Annuity. Annuity A formula provides a more efficient way of expressing the. future value of an ordinary annuity of 1. Where: R = periodic rent. FVF-OA n,i = future value factor of an ordinary annuity. i = rate of interest per period. n= number of compoundi

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• Issues in economics today
• Lecture Issues in economics today
• Macroeconomic issues
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• Price control issues
• Opportunity cost
• Demand model
• Elasticity of demand
• Firm production
• Perfect competition
• Gross domestic product
• Federal spending
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• Flaws in the CPI
• International trade
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• Economic models of health care
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• Prescription drugs
• Economics of crime
• Human capital
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• Head start
• Affirmative action