Chapter 6-1

CHAPTER

ACCOUNTING AND THE TIME VALUE OF MONEY

Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield

Chapter 6-2

Learning Objectives
1. 2. 3. 4. 5. 6. 7. 8. 9.
Chapter 6-3

Identify accounting topics where the time value of money is relevant. Distinguish between simple and compound interest. Use appropriate compound interest tables. Identify variables fundamental to solving interest problems. Solve future and present value of 1 problems. Solve future value of ordinary and annuity due problems. Solve present value of ordinary and annuity due problems. Solve present value problems related to deferred annuities and bonds. Apply expected cash flows to present value measurement.

Accounting and the Time Value of Money

Basic Time Value Concepts

Applications The nature of interest Simple interest Compound interest Fundamental variables

Single-Sum Problems
Future value of a single sum Present value of a single sum Solving for other unknowns

Annuities

More Complex Situations

Deferred annuities Valuation of long-term bonds Effectiveinterest method of bond discount/ premium amortization

Present Value Measurement

Choosing an appropriate interest rate Expected cash flow illustration

Future value of ordinary annuity Future value of annuity due Examples of FV of annuity Present value of ordinary annuity Present value of annuity due Examples of PV of annuity

Chapter 6-4

Basic Time Value Concepts

Time Value of Money
In accounting (and finance), the phrase time value of money indicates a relationship between time and moneythat a dollar received today is worth more than a dollar promised at some time in the future.
Why?

Chapter 6-5

LO 1 Identify accounting topics where the time value of money is relevant.

Basic Time Value Concepts

Applications to Accounting Topics:
1. Notes 2. Leases 3. Pensions and Other 5. Sinking Funds 6. Business Combinations 7. Disclosures 8. Installment Contracts

Postretirement Benefits

4. Long-Term Assets

Chapter 6-6

LO 1 Identify accounting topics where the time value of money is relevant.

Basic Time Value Concepts

Nature of Interest
Payment for the use of money. Excess cash received or repaid over the amount borrowed (principal).

Variables involved in financing transaction:

1. Principal - Amount borrowed or invested. 2. Interest Rate - A percentage. 3. Time - The number of years or portion of a year

that the principal is outstanding.

Chapter 6-7

LO 1 Identify accounting topics where the time value of money is relevant.

Basic Time Value Concepts

Simple Interest
Interest computed on the principal only.
Illustration: KC borrows $20,000 for 3 years at a rate of 7% per year. Compute the total interest to be paid for the 3 years.

Total Interest

Interest = p x i x n = $20,000 x .07 x 3 = $4,200

Federal law requires the disclosure of interest rates on an annual basis in all contracts.
Chapter 6-8

LO 2 Distinguish between simple and compound interest.

Basic Time Value Concepts

Simple Interest
Interest computed on the principal only.
Illustration: KC borrows $20,000 for 3 years at a rate of 7% per year. Compute the total interest to be paid for the 1 year.

Annual Interest

Interest = p x i x n = $20,000 x .07 x 1 = $1,400

Chapter 6-9

LO 2 Distinguish between simple and compound interest.

Basic Time Value Concepts

Simple Interest
Interest computed on the principal only.
Illustration: On March 31, 2011, KC borrows $20,000 for 3 years at a rate of 7% per year. Compute the total interest to be paid for the year ended Dec. 31, 2011.

Partial Year

Interest = p x i x n = $20,000 x .07 x 9/12 = $1,050

Chapter 6-10

LO 2 Distinguish between simple and compound interest.

Basic Time Value Concepts

Compound Interest
Computes interest on
the principal and any interest earned that has not been paid or

withdrawn.

Most business situations use compound interest.

Chapter 6-11

LO 2 Distinguish between simple and compound interest.

Basic Time Value Concepts

Illustration: Tomalczyk Company deposits $10,000 in the Last National Bank, where it will earn simple interest of 9% per year. It deposits another $10,000 in the First State Bank, where it will earn compound interest of 9% per year compounded annually. In both cases, Vasquez will not withdraw any interest until 3 years from the date of deposit. Illustration 6-1
Simple versus compound interest

Year 1 $10,000.00 x 9% Year 2 $10,900.00 x 9%

$ 900.00 $ 10,900.00 $ 981.00 $ 11,881.00

Year 3 $11,881.00 x 9% $1,069.29 $ 12,950.29

Chapter 6-12

LO 2 Distinguish between simple and compound interest.

Basic Time Value Concepts

Compound Interest Tables
Table 1 - Future Value of 1 Table 2 - Present Value of 1 Table 3 - Future Value of an Ordinary Annuity of 1 Table 4 - Present Value of an Ordinary Annuity of 1

Table 5 - Present Value of an Annuity Due of 1

Number of Periods = number of years x the number of compounding periods per year. Compounding Period Interest Rate = annual rate divided by the number of compounding periods per year.
Chapter 6-13

LO 3 Use appropriate compound interest tables.

Basic Time Value Concepts

Compound Interest
Illustration 6-2

How much principal plus interest a dollar accumulates to at the end of each of five periods, at three different rates of compound interest.
Chapter 6-14

LO 3 Use appropriate compound interest tables.

Basic Time Value Concepts

Compound Interest
Formula to determine the future value factor (FVF) for 1:

Where:

FVF n,i = future value factor for n periods at i interest n = number of periods i = rate of interest for a single period

Chapter 6-15

LO 3 Use appropriate compound interest tables.

Basic Time Value Concepts

Compound Interest
Determine the number of periods by multiplying the number of years involved by the number of compounding periods per year.
Illustration 6-4

Chapter 6-16

LO 3 Use appropriate compound interest tables.

Basic Time Value Concepts

Compound Interest
A 9% annual interest compounded daily provides a 9.42% yield.
Effective Yield for a $10,000 investment.
Illustration 6-5

Chapter 6-17

LO 3 Use appropriate compound interest tables.

Basic Time Value Concepts

Fundamental Variables to Compound Interest
Rate of Interest Number of Time Periods Present Value

Future Value
Illustration 6-6

Chapter 6-18

LO 4 Identify variables fundamental to solving interest problems.

Single-Sum Problems
Two Categories
Unknown Present Value

Unknown Future Value

Chapter 6-19

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
Future Value of a Single Sum
The value at a future date of a given amount invested, assuming compound interest.

Where: FV = future value PV = present value (principal or single sum) FVF n,i = future value factor for n periods at i interest

Chapter 6-20

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

Illustration: Bruegger Co. wants to determine the future value of $50,000 invested for 5 years compounded annually at an interest rate of 11%.

= $84,253

Chapter 6-21

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

Alternate Calculation

Illustration: Bruegger Co. wants to determine the future value of $50,000 invested for 5 years compounded annually at an interest rate of 11%.

What table do we use?

Chapter 6-22

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

i=11% n=5

Alternate Calculation

What factor do we use?

$50,000
Present Value
Chapter 6-23

1.68506
Factor

$84,253
Future Value

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

BE6-1: Chris Spear invested $15,000 today in a fund that earns 8% compounded annually. To what amount will the investment grow in 3 years? Present Value $15,000 Future Value?

What table do we use?

Chapter 6-24

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

i=8% n=3

$15,000
Present Value

1.25971
Factor

$18,896
Future Value

Chapter 6-25

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

PROOF
Beginning Balance Rate $ 15,000 x 8% 16,200 x 8% 17,496 x 8% Previous Year-End Interest Balance Balance = 1,200 + 15,000 = $ 16,200 = 1,296 + 16,200 = 17,496 = 1,400 + 17,496 = 18,896

Year 1 2 3

BE6-1: Chris Spear invested $15,000 today in a fund that earns 8% compounded annually. To what amount will the investment grow in 3 years?
Chapter 6-26

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

Present Value $15,000 Future Value?

BE6-1: Chris Spear invested $15,000 today in a fund that earns 8% compounded semiannually. To what amount will the investment grow in 3 years?

What table do we use?

Chapter 6-27

LO 5 Solve future and present value of 1 problems.

Future Value of a Single Sum

i=4% n=6

What factor? $15,000

Present Value
Chapter 6-28

1.26532
Factor

$18,980
Future Value

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
Present Value of a Single Sum
The value now of a given amount to be paid or received in the future, assuming compound interest.

Where:
FV = future value PV = present value (principal or single sum) PVF n,i = present value factor for n periods at i interest

Chapter 6-29

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

Illustration: What is the present value of $84,253 to be received or paid in 5 years discounted at 11% compounded annually?

= $50,000

Chapter 6-30

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

Alternate Calculation

Illustration: What is the present value of $84,253 to be received or paid in 5 years discounted at 11% compounded annually?

What table do we use?

Chapter 6-31

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

i=11% n=5

What factor?

$84,253
Future Value
Chapter 6-32

.59345
Factor

$50,000
Present Value

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

BE6-2: Tony Bautista needs $25,000 in 4 years. What amount must he invest today if his investment earns 12% compounded annually? Present Value? Future Value $25,000

What table do we use?

Chapter 6-33

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

i=12% n=4

What factor?

$25,000
Future Value
Chapter 6-34

.63552
Factor

$15,888
Present Value

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

BE6-2: Tony Bautista needs $25,000 in 4 years. What amount must he invest today if his investment earns 12% compounded quarterly?

Present Value?

Future Value $25,000

What table do we use?

Chapter 6-35

LO 5 Solve future and present value of 1 problems.

Present Value of a Single Sum

i=3% n=16

$25,000
Future Value
Chapter 6-36

.62317
Factor

$15,579
Present Value

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
Solving for Other Unknowns
ExampleComputation of the Number of Periods
The Village of Somonauk wants to accumulate $70,000 for the construction of a veterans monument in the town square. At the beginning of the current year, the Village deposited $47,811 in a memorial fund that earns 10% interest compounded annually. How many years will it take to accumulate $70,000 in the memorial fund?
Illustration 6-13

Chapter 6-37

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
ExampleComputation of the Number of Periods
Illustration 6-14

Using the future value factor of 1.46410, refer to Table 6-1 and read down the 10% column to find that factor in the 4-period row.

Chapter 6-38

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
ExampleComputation of the Number of Periods
Illustration 6-14

Using the present value factor of .68301, refer to Table 6-2 and read down the 10% column to find that factor in the 4-period row.

Chapter 6-39

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
Solving for Other Unknowns
ExampleComputation of the Interest Rate
Illustration 6-15

Chapter 6-40

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
ExampleComputation of the Interest Rate
Illustration 6-16

Using the future value factor of 1.76234, refer to Table 6-1 and read across the 5-period row to find the factor.

Chapter 6-41

LO 5 Solve future and present value of 1 problems.

Single-Sum Problems
ExampleComputation of the Interest Rate
Illustration 6-16

Using the present value factor of .56743, refer to Table 6-2 and read across the 5-period row to find the factor.

Chapter 6-42

LO 5 Solve future and present value of 1 problems.

Annuities
Annuity requires:
(1)

Periodic payments or receipts (called rents) of the same amount,

(2) Same-length interval between such rents, and (3) Compounding of interest once each interval.

Two Types
Chapter 6-43

Ordinary annuity - rents occur at the end of each period. Annuity Due - rents occur at the beginning of each period.
LO 6 Solve future value of ordinary and annuity due problems.

Annuities
Future Value of an Ordinary Annuity
Rents occur at the end of each period. No interest during 1st period. Present Value
$20,000 20,000 20,000 20,000 20,000 20,000

Future Value
20,000 20,000

Chapter 6-44

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

Illustration: Assume that $1 is deposited at the end of each of 5 years (an ordinary annuity) and earns 12% interest compounded annually. Following is the computation of the future value, using the future value of 1 table (Table 6-1) for each of the five $1 rents.
Illustration 6-17

Chapter 6-45

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

A formula provides a more efficient way of expressing the future value of an ordinary annuity of 1.

Where:

R = FVF-OA n,i = i = n =
Chapter 6-46

periodic rent future value factor of an ordinary annuity rate of interest per period number of compounding periods

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

Illustration: What is the future value of five $5,000 deposits made at the end of each of the next 5 years, earning interest of 12%?

Illustration 6-19

= $31,764.25

Chapter 6-47

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

Alternate Calculation

Illustration: What is the future value of five $5,000 deposits made at the end of each of the next 5 years, earning interest of 12%?

Illustration 6-19

What table do we use?

Chapter 6-48

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

i=12% n=5

What factor?

$5,000
Deposits
Chapter 6-49

6.35285
Factor

$31,764
Present Value

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

Present Value
$30,000 30,000 30,000 30,000 30,000 30,000

Future Value
30,000 30,000

BE6-13: Bayou Inc. will deposit $30,000 in a 12% fund at the end of each year for 8 years beginning December 31, 2010. What amount will be in the fund immediately after the last deposit?

What table do we use?

Chapter 6-50

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Ordinary Annuity

i=12% n=8

$30,000
Deposit
Chapter 6-51

12.29969
Factor

$368,991
Future Value

LO 6 Solve future value of ordinary and annuity due problems.

Annuities
Future Value of an Annuity Due
Rents occur at the beginning of each period.

Interest will accumulate during 1st period.

Annuity Due has one more interest period than Ordinary Annuity.

Factor = multiply future value of an ordinary annuity factor by 1 plus the interest rate.
$20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000

Future Value

0
Chapter 6-52

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Comparison of Ordinary Annuity with an Annuity Due
Illustration 6-21

Chapter 6-53

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Computation of Rent
Illustration: Assume that you plan to accumulate $14,000 for a down payment on a condominium apartment 5 years from now. For the next 5 years, you earn an annual return of 8% compounded semiannually. How much should you deposit at the end of each 6month period?
Illustration 6-24

R = $1,166.07

Chapter 6-54

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Illustration 6-24

Alternate Calculation

Computation of Rent
$14,000 12.00611

= $ $1,166.07

Chapter 6-55

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Computation of Number of Periodic Rents
Illustration: Suppose that a companys goal is to accumulate $117,332 by making periodic deposits of $20,000 at the end of each year, which will earn 8% compounded annually while accumulating. How many deposits must it make?

Illustration 6-25

5.86660

Chapter 6-56

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Computation of Future Value
Illustration: Mr. Goodwrench deposits $2,500 today in a savings account that earns 9% interest. He plans to deposit $2,500 every year for a total of 30 years. How much cash will Mr. Goodwrench accumulate in his retirement savings account, when he retires in 30 years?
Illustration 6-27

Chapter 6-57

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

Present Value
20,000 $20,000 20,000 20,000 20,000 20,000 20,000

Future Value
20,000

Illustration: Bayou Inc. will deposit $20,000 in a 12% fund at the beginning of each year for 8 years beginning January 1, Year 1. What amount will be in the fund at the end of Year 8?

What table do we use?

Chapter 6-58

LO 6 Solve future value of ordinary and annuity due problems.

Future Value of an Annuity Due

i=12% n=8

12.29969
$20,000
Chapter 6-59

x
x

1.12
Factor

13.775652
$275,513
Future Value

13.775652 =

Deposit

LO 6 Solve future value of ordinary and annuity due problems.

Annuities
Present Value of an Ordinary Annuity
Present value of a series of equal amounts to be withdrawn or received at equal intervals. Periodic rents occur at the end of the period. Present Value
$100,000 100,000 100,000 100,000 100,000 100,000

.....
0
Chapter 6-60

19

20

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Ordinary Annuity

Illustration: Assume that $1 is to be received at the end of each of 5 periods, as separate amounts, and earns 12% interest compounded annually.
Illustration 6-28

Chapter 6-61

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Ordinary Annuity

A formula provides a more efficient way of expressing the present value of an ordinary annuity of 1.

Where:

Chapter 6-62

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Ordinary Annuity

Illustration: What is the present value of rental receipts of $6,000 each, to be received at the end of each of the next 5 years when discounted at 12%?

Illustration 6-30

Chapter 6-63

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Ordinary Annuity

Present Value
$100,000 100,000 100,000 100,000 100,000 100,000

.....
0 1 2 3 4 19 20

Illustration: Jaime Yuen wins $2,000,000 in the state lottery. She will be paid $100,000 at the end of each year for the next 20 years. How much has she actually won? Assume an appropriate interest rate of 8%.

What table do we use?

Chapter 6-64

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Ordinary Annuity

i=5% n=20

$100,000
Receipts
Chapter 6-65

9.81815
Factor

$981,815
Present Value

LO 7 Solve present value of ordinary and annuity due problems.

Annuities
Present Value of an Annuity Due
Present value of a series of equal amounts to be withdrawn or received at equal intervals. Periodic rents occur at the beginning of the period. Present Value
$100,000 100,000 100,000 100,000 100,000 100,000

.....
0
Chapter 6-66

19

20

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Annuity Due

Comparison of Ordinary Annuity with an Annuity Due
Illustration 6-31

Chapter 6-67

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Annuity Due

Illustration: Space Odyssey, Inc., rents a communications satellite for 4 years with annual rental payments of $4.8 million to be made at the beginning of each year. If the relevant annual interest rate is 11%, what is the present value of the rental obligations?
Illustration 6-33

Chapter 6-68

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Annuity Due

Present Value
$100,000 100,000 100,000 100,000 100,000 100,000

.....
0 1 2 3 4 19 20

Illustration: Jaime Yuen wins $2,000,000 in the state lottery. She will be paid $100,000 at the beginning of each year for the next 20 years. How much has she actually won? Assume an appropriate interest rate of 8%.

What table do we use?

Chapter 6-69

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Annuity Due

i=8% n=20

$100,000
Receipts
Chapter 6-70

10.60360 =
Factor

$1,060,360
Present Value

LO 7 Solve present value of ordinary and annuity due problems.

Present Value of an Annuity Due

Computation of Interest Rate
Illustration: Assume you receive a statement from MasterCard with a balance due of $528.77. You may pay it off in 12 equal monthly payments of $50 each, with the first payment due one month from now. What rate of interest would you be paying?

Referring to Table 6-4 and reading across the 12-period row, you find 10.57534 in the 2% column. Since 2% is a monthly rate, the nominal annual rate of interest is 24% (12 x 2%). The effective annual rate is 26.82413% [(1 + .02)12 - 1].
Chapter 6-71

LO 7 Solve present value of ordinary and annuity due problems.

More Complex Situations

Deferred Annuities
Rents begin after a specified number of periods. Future Value - Calculation same as the future value of an annuity not deferred.

Present Value - Must recognize the interest that accrues during the deferral period.
Present Value Future Value
100,000 100,000 100,000

.....
0
Chapter 6-72

19

20

LO 8 Solve present value problems related to deferred annuities and bonds.

More Complex Situations

Valuation of Long-Term Bonds
Two Cash Flows:
Periodic interest payments (annuity). Principal paid at maturity (single-sum).
2,000,000 $140,000 140,000 140,000 140,000 140,000 140,000

.....
0
Chapter 6-73

10

LO 8 Solve present value problems related to deferred annuities and bonds.

Valuation of Long-Term Bonds

Present Value
$140,000 140,000 140,000 140,000 140,000 2,140,000

.....
0 1 2 3 4 9 10

BE6-15: Clancey Inc. issues $2,000,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Clancey receive when it issues the bonds?

Chapter 6-74

LO 8 Solve present value problems related to deferred annuities and bonds.

i=8% n=10

Valuation of Long-Term Bonds

PV of Interest

$140,000
Interest Payment
Chapter 6-75

6.71008
Factor

$939,411
Present Value

LO 8 Solve present value problems related to deferred annuities and bonds.

i=8% n=10

Valuation of Long-Term Bonds

PV of Principal

$2,000,000
Principal
Chapter 6-76

.46319
Factor

$926,380
Present Value

LO 8 Solve present value problems related to deferred annuities and bonds.

Valuation of Long-Term Bonds

BE6-15: Clancey Inc. issues $2,000,000 of 7% bonds due in 10 years with interest payable at year-end. Present value of Interest Present value of Principal Bond current market value $939,411 926,380 $1,865,791

Date Account Title Cash Discount on Bonds Bonds payable

Chapter 6-77

Debit 1,865,791 134,209

Credit

2,000,000

LO 8 Solve present value problems related to deferred annuities and bonds.

Valuation of Long-Term Bonds

BE6-15:
Schedule of Bond Discount Amortization 10-Year, 7% Bonds Sold to Yield 8% Cash Interest Paid 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 *
Chapter 6-78

Date 1/1/10 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19

Interest Expense

Bond Discount Amortization 9,263 10,004 10,805 11,669 12,603 13,611 14,700 15,876 17,146 18,533

149,263 150,004 150,805 151,669 152,603 153,611 154,700 155,876 157,146 158,533 *

Carrying Value of Bonds 1,865,791 1,875,054 1,885,059 1,895,863 1,907,532 1,920,135 1,933,746 1,948,445 1,964,321 1,981,467 2,000,000

rounding

LO 8 Solve present value problems related to deferred annuities and bonds.

Present Value Measurement

Concepts Statement No. 7 introduces an expected cash flow approach that uses a range of cash flows and
incorporates the probabilities of those cash flows.

Choosing an Appropriate Interest Rate

Three Components of Interest:

Pure Rate Expected Inflation Rate
Risk-free rate of return. FASB states a company should discount expected cash flows by the risk-free rate of return.

Credit Risk Rate

Chapter 6-79

LO 9 Apply expected cash flows to present value measurement.

Copyright
Copyright 2009 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

Chapter 6-80