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In a world of uncertainty no one knows what future profits will be (especially > 1 year from now). All we can do is estimate. Who should we ask? The company management has an incentive to give out estimates that may be too optimistic. If you ask the competitors they are probably too pessimistic. Fortunately we have a machine called the stock market which ...


The annuity method is the correct method. I am not familiar with wolframalpha but I assume it is correct. Look at it this way: in the second case (take out 481,000, repay 500,000 after 100 days) you have full use of the borrowed 481,000 for 100 days. In the first case (takeout 481,000, repay with an annuity of 10 payments over 100 day) you effectively ...

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