In many industries, CFOs are not suited to the CEO role, because their skills do not reflect the key competitive advantages of the firm. However, in many cases the CFO is in the best position to drive shareholder value, and their skills in evaluating and structuring mergers and acquisitions can prove invaluable.
2) 1. The present value of 5700 one year from now at 3.6% interest is $5,501.93. The present value of 8900 two years from now at 3.6% interest is $8,294.14. The combined present value of these two accounts is $13.796.07.
2. At a 5% discount rate, the NPVs of the cash flows are: Year 1 $43.809m; Year 2 $67.120m; Year 3 $57.877m for a total of $168.806m. At a 12% discount rate the NPVs of these flows are: Year 1 $41.071m; Year 2 $58.992 m; Year 3 $47.689 m for a total of $147.753m.
At a discount rate of 10% the NPVs of the cash flows are: Year 1 $41.818M; Year 2 $61.157m; Year 3 $50.338m for a total of $153.313m. At a discount rate of 8% the NPVs of the cash flows are: Year 1 $42.592m; Year 2 $63.443m; Year 3 $53.186m for a total of $159.222m. At a discount rate of 6% the NPVs of the cash flows are: Year 1 $43.396m; Year 2 $65.859m; Year 3 $56.254m for a total of $165.510.
At a discount rate of 4% the NPVs of the cash flows are: Year 1 $44.230m; Year 2 $68.417m; Year 3 $59.562m for a total of $172.10m.
With each change in the discount rate from 10% down to 2%, the value of the flows is greater. The time value of the money increases as the discount rate decreases, as less money is theoretically lost due to inflation or interest. Therefore, as the value of the flows increases, the value of the...
CFO Due to the increasingly complex nature Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations? CFOs are increasingly asked to engage in strategic planning for organizations, and to interact with other members of the managerial board in a meaningful
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