Financial Statement Analysis - the gain on retirement under IFRS

CFA Level I FRA
#1

The market value of debt at retirement can be determined by discounting the future cash flows at the current market rate (5%) by using a financial calculator:

Face value (FV) = £20,000,000; i = 5%; PMT = £1,200,000; N = 2; Compute present value (PV) = £20,371,882.

The book value after the third interest payment (two payments remaining) can be found by using either a financial calculator and the market rate at the time of issue (4%) or an amortization table (shown next).

FV = £20,000,000; i = 4%; PMT = £1,200,000; N = 2; Compute PV = £20,754,438.

The bond’s initial value (required for amortization) can be found by using a financial calculator:

FV = 20,000,000; i = 4%; PMT = 1,200,000; N = 5; Compute PV = 21,780,729.

How can we calculate the Present Value (PV) by calculator? any formula?

Thanks.

#2

On the BAII:

2nd CLR TVM
P/Y=C/Y=1
END (payments at end of year)
N 5 I 4 PMT 1,200,000 FV 20,000,000 CPT PV 21,780,729

The manual has an example you can follow to practice.

#3

Know how to calculate finally. Thank you so much.

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