Capital Budgeting Methods AGEC Spring 2010
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Present Value Interest Factor (PIF) Table PIF r,n = (1 + r) -n
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Present Value Interest Factor (PIF) Table PIF r,n = (1 + r) -n
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EPIF r,n = [1 – (1 / (1+ r) n )] / r Equal Payment Present Value Interest Factor (EPIF) Table
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EPIF r,n = [1 – (1 / (1+ r) n )] / r Equal Payment Present Value Interest Factor (EPIF) Table
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I will come back to this table when we cover pro forma analysis and how to project the values in this table required in investment analysis.
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Set NPV equal to zero and solve for T, the terminal value.
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G is the expected rate of appreciation
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Equal net cash flows
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Page 83 in booklet Capital gains tax rate is 25% Capital gains tax rate is 25% Comparable land values Comparable land values Equal net cash flows
Page 83 in booklet Capital gains tax rate is 25% Capital gains tax rate is 25% 7% land value appreciation rate 7% land value appreciation rate Comparable land values Comparable land values Equal net cash flows
Page 83 in booklet Capital gains tax rate is 25% Capital gains tax rate is 25% 7% land value appreciation rate 7% land value appreciation rate 5% discount rate Comparable land values Comparable land values Equal net cash flows
Page 83 in booklet Capital gains tax rate is 25% Capital gains tax rate is 25% 7% land value appreciation rate 7% land value appreciation rate 5% discount rate Comparable land values Comparable land values Equal net cash flows 20 year economic life
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