...Time Value Money How would you explain the Time Value Money in business and what considerations are made when calculating TVM? Provide a sample TVM and solution. I have read the text in our books and also looked up TVM on the Internet. I feel like all this new information is foreign to me. I am trying to find as many resources as possible to re-explain the concepts learned in our text to help me gain a better understanding of each new concept being presented. I found an article on Investopedia written by D. Meyers regarding the Time Value of Money. The article explains how time affects monetary value and in order to understand TVM one must first learn to understand NPV or Net Present Value. NPV is the calculation comparing money received in the future to an amount of money received today while taking into account time and interest to be earned. Since this has been challenging for me to learn I want to break it down (for my own understanding). The one common question that is often asked in almost every business school across America is “Would you rather have $100,000 now or $1,000 a month for the rest of your life?” Before the professors allow students to answer they usually elaborate on the Specific Variation of TVM calculations. First, a student must understand NET PRESENT VALUE. This lets a you value stream of future payments into one lump sum today (often a choice of lottery winners). Then, understanding the definition of PRESENT VALUE which is; present value...
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...given place value. Step 2: If this digit is 5 or greater, add 1 to the digit in the given place value and delete all digits to its right. If this digit is less than 5, delete all digits to the right of the given place value. For example: Round 736.2359 to the nearest hundredth. Solution: Step 1: We locate the digit to the right of the hundredths place Step 2: Since the digit to the right is 5, we add 1 to the digit in the hundredths place and delete all digits to the right of the hundredths place. Thus, 736.2359 rounded to the nearest hundredth is 736.24 Rounding in MyFinanceLab In MyFinanceLab we use input instructions to indicate the place value to which you must round your final answer(s). For example: Let’s say your final answer is 736.2359. • You must enter 736.2 if the input instruction is: Round to the nearest tenth. • You must enter 736.24 if the input instruction is: Round to the nearest hundredth. Note: Other typical input instruction in MyFinanceLab is Round to the nearest cent if the final answer is in currency units. • You should enter 736.236 if the input instruction is: Round to three decimal places. Now, let’s use a simple Time Value of Money (TVM) question you may encounter in MyFinanceLab. |...
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...BU111 Exam-Aid Session Wednesday, December 3rd, 2014 NICK BARBOUR & MICHAEL BLAIR What is JDCC? Annual undergraduate business competition between 14 universities in Central Canada Universities compete in: ◦ Academic (8 teams), Debate, Sports, Social, Charity Laurier has won School of the Year for the past 5 Years! ◦ Your donation today goes towards fueling win #6, thank you! 2 What is SOS? National organization with campus chapters run by student volunteers Run Exam-Aid sessions, which raise money to fund sustainable education projects in Latin America Email me at mcdo8210@mylaurier.ca for info on how to get involved! Visit lauriersos.com for info on more sessions. (EC120, MA129, PS101, AS101, and more!) Thank you for supporting! 3 Agenda •Social Factors • • • • Ethics CSR Managing Stakeholders Demographics •Political Factors • Going Long (Buy-Sell Transactions) • Margin Buying • Short Selling • Approx. Yield of Bonds •Time Value of Money • How Government Influences • Explanation of Concepts • Retirement Businesses, vice versa • Car Leasing • IP Rights • Bond Pricing • Types of Corporations • International Trade & •Technological Factors Globalization • Opportunities & Threats •Economic Factors 4 Recap: Critical Success Factors Achieving financial performance Meeting customer needs Building quality products and services Encouraging innovation and creativity Gaining employee commitment Creating...
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...TI-84 Plus TI-84 Plus Silver Edition Guidebook Important Information Texas Instruments makes no warranty, either express or implied, including but not limited to any implied warranties of merchantability and fitness for a particular purpose, regarding any programs or book materials and makes such materials available solely on an "as-is" basis. In no event shall Texas Instruments be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the purchase or use of these materials, and the sole and exclusive liability of Texas Instruments, regardless of the form of action, shall not exceed the purchase price of this product. Moreover, Texas Instruments shall not be liable for any claim of any kind whatsoever against the use of these materials by any other party. © 2005 Texas Instruments Incorporated Windows and Macintosh are trademarks of their respective owners. ii USA FCC Information Concerning Radio Frequency Interference This equipment has been tested and found to comply with the limits for a Class B digital device, pursuant to Part 15 of the FCC rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. This equipment generates, uses, and can radiate radio frequency energy and, if not installed and used in accordance with the instructions, may cause harmful interference to radio communications. However, there is no guarantee that interference...
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...BA II PLUS™ Calculator Important Information Texas Instruments makes no warranty, either express or implied, including but not limited to any implied warranties of merchantability and fitness for a particular purpose, regarding any programs or book materials and makes such materials available solely on an "as-is" basis. In no event shall Texas Instruments be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the purchase or use of these materials, and the sole and exclusive liability of Texas Instruments, regardless of the form of action, shall not exceed the purchase price of this product. Moreover, Texas Instruments shall not be liable for any claim of any kind whatsoever against the use of these materials by any other party. USA FCC Information Concerning Radio Frequency Interference This equipment has been tested and found to comply with the limits for a Class B digital device, pursuant to Part 15 of the FCC rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. This equipment generates, uses, and can radiate radio frequency energy and, if not installed and used in accordance with the instructions, may cause harmful interference to radio communications. However, there is no guarantee that interference will not occur in a particular installation. If this equipment does cause harmful interference to radio or television reception, which...
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...BA II PLUS™ PROFESSIONAL Calculator Important Information Texas Instruments makes no warranty, either express or implied, including but not limited to any implied warranties of merchantability and fitness for a particular purpose, regarding any programs or book materials and makes such materials available solely on an “as-is” basis. In no event shall Texas Instruments be liable to anyone for special, collateral, incidental, or consequential damages in connection with or arising out of the purchase or use of these materials, and the sole and exclusive liability of Texas Instruments, regardless of the form of action, shall not exceed the purchase price of this product. Moreover, Texas Instruments shall not be liable for any claim of any kind whatsoever against the use of these materials by any other party. USA FCC Information Concerning Radio Frequency Interference This equipment has been tested and found to comply with the limits for a Class B digital device, pursuant to Part 15 of the FCC rules. These limits are designed to provide reasonable protection against harmful interference in a residential installation. This equipment generates, uses, and can radiate radio frequency energy and, if not installed and used in accordance with the instructions, may cause harmful interference to radio communications. However, there is no guarantee that interference will not occur in a particular installation. If this equipment does cause harmful interference to radio or television...
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...budgeting, risk management, working capital management and performance assessment. The financing decision chooses sources of cash to finance the investment decisions and involves capital structure, financial instruments, the risk-return trade-off, financial planning and the cost of capital. Ethical considerations and management in the global context are integrated into these topics. Course Credit Exclusion: AP/ECON 3.00 (AS/ECON 4400 3.00 or AK/ECON 4082 3.00) Prerequisite: none Course objectives: The course objectives are to introduce students to the theory of financial management and its application to the business world. It analyzes how financial managers make decisions within a framework which emphasizes the time value of money (TVM) and the relationship between expected return and risk. In addition, we examine the techniques that financial managers use to evaluate feasibility of undertaking new projects (i.e., capital budgeting). This course is very fast paced, technical in nature, and it requires each student to do considerable out-of-class work. Problem solving throughout the course is required. Organization of the Course: Class format is lecture-style, with discussion and analysis of real time events. Students are expected to prepare for class by reading the assigned readings, and are...
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...A book about Africa’s business success stories “Until lions learn to write, hunters will tell their history for them” Africa’s Greatest Entrepreneurs Review by David Fick Africa’s Greatest Entrepreneurs comprises a series of profiles on 16 of some of the most successful and dynamic business people to have emerged from across Africa, with a diverse range of ages and educational backgrounds. The first chapter is about (1) Wale Tinubu, who began an oil trading business working out of an office that doubled as his family’s garage. Using a loan from his mother as capital to build Oando, today, the company has a market capitalisation of $2bn and a presence in the industry across most of West Africa with interests in exploration, refining, distribution and power plant development. This might sound like an extraordinary rags-toriches story, but plenty more follow. We next learn about Ghana’s (2) Prince Kofi Amoabeng, who dropped a military career to pursue a profession in finance, evolving from an introductory service linking friends who had money to invest with those that needed to borrow for their businesses. Today, Amoabeng is the chief executive of Unique Trust, a company with a near $30m turnover and 300 employees, ranked as one of Ghana’s best-performing companies. Unique Trust is a non-bank financial Institution (Finance House) licensed by the Bank of Ghana. Founded in 1997, they aim at providing customers with fast and efficient short-term loans and real returns on investments...
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...Magisteruppsats i Informatik Master thesis in Informatics REPORT NO. 2008:034 ISSN: 1651-4769 Department of Applied Information Technology Soft Systems Methodology in action: A case study at a purchasing department Using SSM to suggest a new way of conducting financial reporting at a purchasing department in the automotive industry OLLE L. BJERKE IT Universtiy of Göteborg Chalmers University of Technology and Universtiy of Gothenburg Göteborg, Sweden 2008 1 Using Soft Systems Methodology at a purchasing department to conduct a study of financial reporting needs Olle L. Bjerke Department of Applied Information Technology IT University of Göteborg Göteborg University and Chalmers University of Technology SUMMARY The aim of this essay has been to try out Soft Systems Methodology on financial reporting at Volvo Cars Corporation (VCC). VCC saw a possible opportunity to improve their reporting processes, and SSM was chosen to deal with this possible problematic situation. Action Research became the natural way of conducting the study since it is almost a mandatory way of conducting SSM. A delimitation was made due to limited resources and only a small part of the purchasing department was involved, namely electrical purchasing. The result of the study is the artifacts from the different SSM steps that points upon how the participants would like the reporting system to be as well as many issues with the current reporting process. These outputs from the method...
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...Finance 3101: Financial Management Syllabus (Spring 2013) Section: 101 Time/Room: TR 12:30 P.M. – 1:50 P.M. / 208 Ambler Learning Ctr. Course Coordinator: Dr. Howard Keen (“DRK”) Course Instructor: James Dooley Office Hours: By Appointment E-mail Address: jsdooley@verizon.net Office Telephone: 215-498-0157 Prerequisites |Economics 1101 (C051) and 1102 (C052); Accounting 2102 (0002) or 2521. Statistics 2101 (C021) or 2103. Any exception to the foregoing prerequisites can | |only be approved by the Department Chair. | | | | | | | |Course Description | | | | | This course provides a survey of the financial problems associated with the life cycle of a business firm. Topics include: financial analysis and planning, capital budgeting, cost of capital, and the sources and uses of business funds. While the emphasis is on decision making within a corporate environment, the tools taught in this course are just as relevant to other forms of business organization and to personal financial management. Course Objectives ...
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...KEATMX01_p001-008.qxd 11/2/12 2:22 PM Page 1 Calculations for Time Value of Money TVM In this appendix, a brief explanation of the computation of the time value of money is given for readers not familiar with this subject. Modern technology has made these calculations very easy. Many computer programs have built-in time-value functions, and a large assortment of handheld calculators will solve these problems using special keys. However, some people who use these methods do not understand the rationale for the answers and merely accept the results. At the other extreme, the calculations could be made using exponentials and/or logarithms. Such a procedure may provide a thorough learning experience, but it is tedious and time consuming. Compound interest tables have been developed to provide a relatively easy tool for solving time-value problems. They are found in Appendix A at the end of the textbook. Here we walk through four types of calculations, each representing one of the four tables. The Excel icons marked TVM refer to the Excel spreadsheets that can be found on the companion web site. T HE F UTURE VALUE OF A S INGLE S UM Module If you deposit $1,000 in a savings account that pays 7 percent interest annually, and 3A you do not withdraw this interest, the original amount will keep growing. (In real life, bank interest is usually compounded more frequently than once per year, but annual compounding is assumed here. In other words...
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...CORPORATE FINANCE DEMYSTIFIED TROY A. ADAIR, Jr. McGraw-Hill New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2006 by The McGraw-Hill Companies. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. 0-07-148678-X The material in this eBook also appears in the print version of this title: 0-07-145910-3. All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps. McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. For more information, please contact George Hoare, Special Sales, at george_hoare@mcgraw-hill.com or (212) 904-4069. TERMS OF USE This is a copyrighted work and The McGraw-Hill Companies, Inc. (“McGraw-Hill”) and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted...
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...Syllabus Corporate Finance 1148-FIU01-FIN-6406-SECRXQ_AP_1148-86029 GENERAL INFORMATION | IMPORTANT INFORMATION | COURSE DETAIL | COURSE CALENDAR GENERAL INFORMATION PROFESSOR INFORMATION Instructor: Prof. Edward R. Lawrence Phone: (305) 348-0082 Office: RB 207A Fax: (305) 348-4245 Office Hours: By Appointment E-mail: elawrenc@fiu.edu Website: Professor's Bio COURSE DESCRIPTION AND PURPOSE The course is covered in two parts. In part one; we will have an overview of financial management and financial environment. We will analyze firm’s financial performance using financial ratio analysis. We will then discuss the time value of money (TVM) and use the concept of TVM in the valuation of bonds and stocks. In part two we will understand the methods for computing cash flows and the company’s cost of capital and then use them to learn capital budgeting which involves project selection decisions. COURSE OBJECTIVES The objective of this course is to give the students an operational knowledge of corporate finance by combining theory and applications. Introduce the concepts or risk, return, and time-value-of-money as applied to valuation of securities and capital budgeting. Here are the course level learning outcomes: 1. Perform Internet research and find relevant financial data. 2. Use information technology to assess the financial position of organizations. 3. Learn how to perform financial statement analysis. 4. Learn the mathematics of Time Value of Money...
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...CHAPTER 15 INVESTMENTS CONTENT ANALYSIS OF EXERCISES AND PROBLEMS Time Range (minutes) 10-15 10-15 10-15 15-20 15-20 10-15 Number E15-1 E15-2 E15-3 E15-4 E15-5 E15-6 Content Trading Securities. (Easy) Journal entries. Unrealized holding gain. Balance sheet disclosure. Trading Securities. (Moderate) Journal entries. Income statement and balance sheet disclosures. Long-Term Investments. (Easy) Securities available for sale. Purchase and adjusting entries. Available-for-Sale Securities. (Easy) Journal entries. Compute unrealized increase/decrease balance. Available-for-Sale Securities. (Easy) Journal entries. Balance sheet disclosure. Held-to-Maturity Bond Investment. (Easy) Premium, straight-line amortization, journal entries. Error in recording interest at acquisition. Held-to-Maturity Bond Investment. (Easy) Discount, semiannual interest receipts, straight-line and effective interest methods of amortization, journal entries. Held-to-Maturity Bond Investment. (Moderate) Discount, semiannual interest receipts, sale at gain. Effective interest method. Journal entries. Bond Investment. (Moderate) Discount, semiannual interest receipts, amortization schedule using effective interest method, journal entries. Bond Investment. (Moderate) Premium, semiannual interest receipts, amortization schedule using effective interest method, journal entries. Bond Investment. (Moderate) Premium, semiannual interest receipts, sale at loss. Effective interest method. Journal entries. Transfer...
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...Capital Budgeting Techniques Mona School of Business Financial Management Lecturer: Kathya Beckford By the end of this session you will understand: 1. What capital budgeting is How to calculate and interpret a project’s: 2. Payback Period Discounted Payback Period Net Present Value (NPV) Internal Rate of Return (IRR) Profitability Index (PI) 3. How to choose projects when capital is rationed What is capital budgeting? Capital budgeting is the process of planning expenditure on assets or projects that can have a long-term impact on an institution. Examples of capital projects Adopting a new enterprise-wide software system Launching a new advertising campaign Replacing factory equipment Expanding sales into a new market Building a road Why is capital budgeting important? Helps firm make smart decisions Capital projects large and expensive- not easy to change course Allows management team to give input and be on same page Capital budgeting techniques include: Payback Period Discounted Payback Period Net Present Value (NPV) Internal Rate of Return (IRR) Profitability Index (PI) Payback Period- The Concept What is it? The payback period for a project is the expected time it will take to recover the original investment. The decision rule: Accept project if its payback period is less than the maximum allowed. Payback Period- An Example A project requires a $100,000,000 investment...
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