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    Minimum Attractive Rate of Return (MARR)

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    Adi
    The document discusses the Minimum Attractive Rate of Return (MARR). It provides the following key points: 1. The MARR is the lowest return that a financial manager would be willing to accept on a potential investment given the risks and opportunities for other investments. 2. The MARR is not an actual rate of return but a benchmark used to evaluate potential investments. It is higher than a risk-free rate like Treasury bills. 3. The MARR is composed of factors like the risk-free interest rate, expected inflation, project risk, and country risk. Higher risks mean a higher MARR is required. 4. Financial managers use the MARR to decide whether to accept or reject

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    Minimum Attractive Rate of Return (MARR)

    Uploaded by

    Adi
    127 views31 pages
    The document discusses the Minimum Attractive Rate of Return (MARR). It provides the following key points: 1. The MARR is the lowest return that a financial manager would be willing to accept on a potential investment given the risks and opportunities for other investments. 2. The MARR is not an actual rate of return but a benchmark used to evaluate potential investments. It is higher than a risk-free rate like Treasury bills. 3. The MARR is composed of factors like the risk-free interest rate, expected inflation, project risk, and country risk. Higher risks mean a higher MARR is required. 4. Financial managers use the MARR to decide whether to accept or reject

    Original Description:

    Engineering Economic

    Original Title

    Obligasi

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    © © All Rights Reserved

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    The document discusses the Minimum Attractive Rate of Return (MARR). It provides the following key points: 1. The MARR is the lowest return that a financial manager would be willing to accept on a potential investment given the risks and opportunities for other investments. 2. The MARR is not an actual rate of return but a benchmark used to evaluate potential investments. It is higher than a risk-free rate like Treasury bills. 3. The MARR is composed of factors like the risk-free interest rate, expected inflation, project risk, and country risk. Higher risks mean a higher MARR is required. 4. Financial managers use the MARR to decide whether to accept or reject

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    127 views31 pages

    Minimum Attractive Rate of Return (MARR)

    Uploaded by

    Adi
    The document discusses the Minimum Attractive Rate of Return (MARR). It provides the following key points: 1. The MARR is the lowest return that a financial manager would be willing to accept on a potential investment given the risks and opportunities for other investments. 2. The MARR is not an actual rate of return but a benchmark used to evaluate potential investments. It is higher than a risk-free rate like Treasury bills. 3. The MARR is composed of factors like the risk-free interest rate, expected inflation, project risk, and country risk. Higher risks mean a higher MARR is required. 4. Financial managers use the MARR to decide whether to accept or reject

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 31

    Minimum

    Attractive Rate
    of Return
    (MARR)

    In the United States, the current U.S. Treasury Bill


    return is sometimes used as the benchmark safe
    rate. The MARR will always be higher than this, or
    a similar, safe rate. The MARR is not a rate that is
    calculated as a ROR. The MARR is established
    by (financial) managers and is used as a
    criterion against which an alternatives ROR
    is measured, when making the accept/reject
    investment decision.
    2

    The MARR is the lowest return that you would be willing to accept
    given:
    The risks associated with this project
    The opportunities for other investment. So, if other investment
    provides better return, then you must consider it
    The MARR is often decomposed into the sum of the following
    components:
    Traditional inflation-free rate of interest for risk-free loans:
    Expected rate of inflation: from minus to unpredictable
    The anticipated change in the rate of inflation, if any, over
    the life of the investment
    The risk of defaulting on a loan
    The risk profile of a particular venture
    Project risk (level of failure and success of the project)
    Local and global market stability
    Country risk
    interest
    rate
    and itsand
    consecutive
    MARR
    Therefore,
    political
    economical
    stability of a country will
    should
    bethe MARR and consequently the country investment risk.
    influence
    The higher the unstability, the higher

    OBLIGASI
    (BOND)

    Influence of risk on the interest


    rate/bond yield

    Obligasi adalah surat berjangka panjang (long term note)


    yang dikeluarkan suatu perusahaan atau pemerintah
    dengan maksud untuk memperoleh modal yang
    digunakan membiayai proyek berskala besar.
    Esensinya peminjam (penerbit obligasi) menerima uang
    sekarang dan dengan jaminan mengembalikannya
    setelah periode
    tertentu beserta
    bunganya
    diberikan secara
    yangkontinyu

    Influencing factors for bond prices and


    its rate

    Many factors influence the bond prices, for example:


    1. Interest rates. When interest rates go up, bond prices go down,
    and vice versa
    2. Inflation. When inflation is on the increase, bond prices fall, and
    yields rise.
    3. Exchange rates. Exchange rates affect bond prices because
    if, for instance, the pound is struggling against other
    currencies, the Bank of England may feel it necessary to
    increase interest rates.
    4. Corporate cash flow. With corporate bonds, there is another
    factor: the financial performance of the company and the cash it
    is generating. Bond analysts like to know that their debtor is
    generating enough cash to comfortably service the debt.
    5. The length of time to maturity (bond duration). This is
    because over a longer period of time, corporate bonds are at
    more risk of being subject to inflation or interest rate rises. In
    addition, over a long term, there is increased risk that a
    companys financial strength can deteriorate. These factors
    mean that investors will demand a higher yield to reflect the
    8
    additional risks.
    6. Credit ratting. The lower the credit ratting given to the

    Influencing factors for bond prices and


    its rate

    Jenis-jenis Obligasi
    obligasi yang
    Mortgage Bond (Surat Gadai),
    jenis
    disertai dengan
    jaminan barang.
    Pihak
    yang
    mengeluarkan
    M.B. menyertakan
    barang atau
    aset yang
    senilai dengan surat tersebut sebagai jaminan bagi
    pemegang M.B.
    Jika pihak penerbit surat gadai (peminjam uang) tidak
    bisa membayar hutangnya, maka otomatis jaminan
    tersebut akan hangus/ berpindah tangan

    10

    Debenture Bond, surat hutang tanpa jaminan. Biasanya


    D.B. diterbitkan oleh perusahaan besar sehingga nama
    perusahaan tersebut sudah menjadi jaminan bagi
    pemegang D.B.
    Bunga
    dari
    sifatnya mengambang, artinya bisa
    mengikuti
    bunga saat jatuh tempo obligasi tersebut.
    D.B.
    dikonversikan menjadi saham
    Debenture Bond
    atau perjanjian dengan
    policy bisa
    tergantung
    pemilik
    obligasi.

    11

    Municipal Bond, yaitu Surat Obligasi yang bebas pajak.


    Dimana pemilik surat obligasi ini tidak perlu lagi
    membayar pajak, karena sudah ditanggung
    pemerintah. Sehingga municipal bond ini sering
    oleh
    dikeluarkan oleh pemerintah.
    Contoh
    municipal bond adalah ORI (Obligasi
    Republik Indonesia)

    12

    Dalam suatu surat obligasi tercantum :


    Nilai obligasi (bond face value)
    Nilai
    suku bunga obligasi (kecuali Debenture
    Bond apabila floating)
    Periode pembayaran bunga (per tahunnya)
    Batas tempo obligasi (expired date / maturity date)

    13

    Nilai / bond face value dari sebuah obligasi harus


    dicantumkan karena :
    Mewakili
    jumlah pinjaman pokok yang harus
    dikembalikan kepada pemegang obligasi pada saat maturity
    date.
    Jumlah
    bunga yang akan dibayarkan setiap periode
    tertentu tergantung dari bond face value yang besarnya :

    14

    Sebuah surat obligasi bisa dibeli dengan diskon (di


    bawah bond face value) atau dibeli dengan premium (di
    atas bond face value). Tetapi penghitungan bunga yang
    dibayarkan tetap berdasarkan bond face valuenya.

    15

    BOND
    Ratting

    16

    Definition of bond ratting


    system

    In investment, the bond credit rating represents the credit


    worthiness of corporate or government bonds. It is not to be
    confused with an individual's credit score. The ratings are
    published by credit rating agencies and used by investment
    professionals to assess the likelihood the debt will be repaid.
    The highest bond ratting means:
    Lower interest rate
    Higher possibility of getting re-paid
    Lower risk
    The objective of the rating agency is to assign a municipal
    bond a credit rating to
    make it faster for market
    participants to evaluate risk. World known bond ratting
    agency:
    Moody
    Fitch
    Standard & Poors
    17

    Influencing factors for bond prices and


    its rate

    18

    Definition of bond
    ratting tier

    19

    Upgrade and Downgrades of the


    ratting
    On an ongoing basis, Moodys and S&P upgrade or downgrade bond
    issuers and bond issues. For instance, if a states fiscal picture is
    deteriorating, Moodys may downgrade a states rating. For example,
    it could go down from Aaa down to Aa.
    The effects when a bond issuer gets downgraded:
    the yield on the bonds from that issuer will usually go up; this is
    to compensate prospective buyers of the bonds for a perceived
    increase in risk reflective of the lowered rating. For existing
    bondholders, the price of the bonds they hold will go down.
    A change in rating could mean little to an existing bondholder
    provided that 1) the bondholder does not plan on selling the bonds
    prior to maturity, and 2) the bonds do not default.

    20

    Exemplary credit ratting

    21

    Inflation

    22

    Influence of inflation
    Inflation influences many financial aspects since it influences the rate of return
    (RoR), mortgage rate, obligation rate, and lending rate
    Inflation means that cost and revenue cash flow estimates increase over time.
    This increase is due to the changing value of money that is forced upon a
    countrys currency by inflation, thus making a unit of currency (such as the
    dollar) worth less relative to its value at a previous time.
    We see the effect of inflation in that money purchases less now than it did at a
    previous time. Higher inflation contributes to:
    A reduction in purchasing power of the currency
    An increase in the CPI (consumer price index)
    An increase in the cost of equipment and its maintenance
    An increase in the cost of salaried professionals and hourly employees
    A reduction in the real rate of return on personal savings and certain
    corporate investments
    23

    Recall: Terminology and symbols

    It is important to note that the symbol A always represents a uniform


    amount (i.e., the same amount each period) that extends
    through consecutive interest periods. Both conditions must exist
    24
    before the series can be represented by A .

    Contoh
    Berapa bunga yang harus dibayarkan kepada pemegang
    obligasi setiap 6 bulan untuk obligasi 4% $1000 yang
    jatuh tempo setelah 20 tahun.
    Jawab : disini V = $1000; b = 4%; c = 2
    Maka :
    Jadi setiap 6 bulan obligasi tersebut akan menghasilkan
    $20 bagi pemegangnya.

    25

    Contoh 2
    Berapa bunga yang diterima pemegang obligasi jika
    sebuah obligasi bernilai $5000, bunga 6% jatuh tempo
    setelah 10 tahun dan dibayarkan tiap triwulan.
    Jawab : V = $ 5000; b = 6%/ th ; c = 4
    Jumlah bunga = I = (5000)x(0,06)/4 = 75
    Jadi setiap 3 bulan obligasi tersebut akan menghasilkan
    $75 bagi pemegangnya.

    26

    RATE OF RETURN PADA INVESTASI OBLIGASI

    Perhitungan ini penting bagi orang yang berminat


    membeli obligasi sebagai investasi karena harus
    dipikirkan
    apakah
    obligasi
    tersebut
    membeli
    menguntungkan
    atau tidak
    Tetapi hal ini tidak berlaku/ tidak memungkinkan bagi
    obligasi jenis floating mengingat pembayarannya selalu
    mengikuti tingkat bunga saat pembayaran (tidak pasti)

    27

    Contoh
    Sebuah obligasi bernilai V = $10.000, b = 6%, maturity
    date 15 tahun dan dibayarkan per semester (c = 2).
    Berapa total investasi yang pantas jika semua
    pendapatan diterimakan sekarang dengan suku bunga
    bank 4% per 6 bulan?
    Jawab:
    Jumlah bunga = I = (10.000)x(0,06)/2

    = $300 tiap 6 bulan

    28

    Bila digambar cash flow untuk tiap semester selama 15


    tahun adalah:

    P = 300(P/A;4%;30) + 10.000(P/F;4%;30)
    P = (300 x 17,292) + (10.000 x 0,3083) = 8270,6
    29

    Analisa
    Dengan nilai P = $8270, maka obligasi tersebut harus
    mempunyai harga maksimum $8270 (harga diskon atau
    lebih rendah dari face value) agar menguntungkan
    dengan tingkat suku bunga 4% / semester

    30

    Contoh
    Berapa
    laju bunga bank ekivalen untuk obligasi
    4%
    $1000
    jatuh tempo 20 tahun, paid per semester),
    dan dibeli dengan diskon sehingga harganya $800
    Petunjuk: Gambarkan diagram cash flow terlebih dahulu

    31

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