Page 11 - Mathematics of Business and Finance

Contents xi

Chapter 13

Bonds and Sinking Funds 604
Introduction ...............................................................................................................605
13.1 Bond Terminology .......................................................................................................605
Exercises .................................................................................................................607

13.2 Calculating Purchase Price and Yield Rate of Bonds .............................................608
Calculating the Purchase Price .................................................................................608
Calculating the Yield Rate.........................................................................................616
Exercises .................................................................................................................618
13.3 Quotation of Bonds ....................................................................................................621
Using the Financial Calculator to Solve Bond Problems ..........................................625
Exercises .................................................................................................................626

13.4 Constructing a Bond Schedule ..................................................................................628
Amortization of Premium ..........................................................................................628
Accumulation of Discount ........................................................................................629
Exercises .................................................................................................................631
13.5 Sinking Funds ..............................................................................................................632
Sinking Fund Calculations and Constructing a Sinking Fund Schedule ..................632
Calculating the Periodic Cost and Constructing a Partial Sinking Fund Schedule ..635
Exercises .................................................................................................................637
Review Exercises ..........................................................................................................641
Self-Test Exercises ........................................................................................................643
Spreadsheet Solutions ..................................................................................................647
Chapter 14

Business Investment Decisions 654

Introduction ...............................................................................................................655
14.1 Discounted Cash Flow (DCF) .....................................................................................656
Using the Cash Flow Worksheet to Solve DCF Problems ........................................657
Exercises .................................................................................................................660
14.2 Net Present Value (NPV) .............................................................................................661
Exercises .................................................................................................................666

14.3 Internal Rate of Return (IRR) .....................................................................................668
Exercises .................................................................................................................669

14.4 Payback Period ...........................................................................................................671
Exercises .................................................................................................................673
Review Exercises ..........................................................................................................674
Self-Test Exercises ........................................................................................................676
Spreadsheet Solutions ..................................................................................................678

Answer Key ........................................................................................................682
Glossary..............................................................................................................704

Index ...................................................................................................................708
Financial Calculator Instructions ...................................................................714
Summary of Formulas ......................................................................................716