FVPV

D James Wrote:
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> As a follow on here. I struggled with my baII on
> saturday with one of these q's! Seems silly but
> couldnt punch it out. In example above. I simply
> use CF0 -1mill , CF1-CF9 0 and CF10 as 20 mill.
> 1/y 15. N 10. didnt get correct answer....clearly
> manula calc is straighfoward buy For my education
> what have I done wrong? Il be review TVM tonight
> thats for sure!

That would be the calculation if the 25mil were guaranteed, but you need to discount the 20mil back to T0 and then weight it by it's probability of happening i.e. 80%, then subtract the risk weighted initial outlay 1mil*20%