Time value of money

Question 1

How do you calculate the present value of a future cash flow?

Answer 1

PV = FV / (1+r)^tPV

Question 2

What is the formula for the present value of a perpetuity?

Answer 2

PV = C/r

Question 3

What is the present value of a growing perpetuity

Answer 3

PV= C/(r−g)

Question 4

How do you calculate the expected return of a set of scenarios

Answer 4

E[R]=E{ Pi ·Ri