Decision chart used in capital budgeting
It is only natural that finance projections use time value of money (TVM) – a building block of
finance. Options for dealing with time value factors is to use an independent table (can be
awkward), use excel PV function formulas or build your own formulas.
In Managerial Accounting you were introduced to capital budgeting – what is capital budgeting.
Versus operating budget.
Table 1 Table 2 Table 2B Table 3 Table 4
FV Single FV FV PV Single PV Table 1
Sum Annuity EOP Annuity BOP Sum Annuity
Rate 7.00% 7.00% 7.00% 7.00% 7.00%
Period
1 1.07000 1.00000 1.07000 0.93457944 0.9345794 Table 2
2 1.14490 2.07000 2.21490 0.87343873 1.8080182
3 1.22504 3.21490 3.43994 0.81629788 2.6243160
4 1.31080 4.43994 4.75074 0.76289521 3.3872113
5 1.40255 5.75074 6.15329 0.71298618 4.1001974 Table 2B
6 1.50073 7.15329 7.65402 0.66634222 4.7665397
7 1.60578 8.65402 9.25980 0.62274974 5.3892894
8 1.71819 10.25980 10.97799 0.5820091 5.9712985
9 1.83846 11.97799 12.81645 0.54393374 6.5152322 Table 3
10 1.96715 13.81645 14.78360 0.50834929 7.0235815
11 2.10485 15.78360 16.88845 0.4750928 7.4986743
12 2.25219 17.88845 19.14064 0.44401196 7.9426863 Table 4
13 2.40985 20.14064 21.55049 0.41496445 8.3576507
14 2.57853 22.55049 24.12902 0.38781724 8.7454680
15 2.75903 25.12902 26.88805 0.36244602 9.1079140 1.629169
16 2.95216 27.88805 29.84022 0.3387346 9.4466486 0.33798
17 3.15882 30.84022 32.99903 0.31657439 9.7632230
18 3.37993 33.99903 36.37896 0.29586392 10.0590869
19 3.61653 37.37896 39.99549 0.27650833 10.3355952
20 3.86968 40.99549 43.86518 0.258419 10.5940142
21 4.14056 44.86518 48.00574 0.24151309 10.8355273
22 4.43040 49.00574 52.43614 0.22571317 11.0612405
23 4.74053 53.43614 57.17667 0.21094688 11.2721874
24 5.07237 58.17667 62.24904 0.19714662 11.4693340
25 5.42743 63.24904 67.67647 0.18424918 11.6535832
26 5.80735 68.67647 73.48382 0.17219549 11.8257787
27 6.21387 74.48382 79.69769 0.16093037 11.9867090
28 6.64884 80.69769 86.34653 0.15040221 12.1371113
29 7.11426 87.34653 93.46079 0.14056282 12.2776741
