Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

III. Valuation of Future Cash Flows

6. Discounted Cash Flow Valuation

© The McGraw-Hill Companies, 2002

PART THREE Valuation of Future Cash Flows

Now you can write down this answer to save it, but that's inefficient. All calculators have a memory where you can store numbers. Why not just save it there? Doing so cuts way down on mistakes because you don't have to write down and/or rekey numbers, and it's much faster.

Next we value the second cash flow. We need to change N to 2 and FV to 400. As long as we haven't changed anything else, we don't have to reenter %i or clear out the calculator, so we have:


Solve for

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