Working Capital and Financial Management

Working Capital and Financial Management - Working Capital...

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Working Capital and Financial Management A. Financial Modeling (know objectives, techniques, and limitations) 1. Financial Indexes 2. Taxes and Opportunity Costs 3. Models a. Economic Value Added b. Cash Flow - A working capital technique that delays the outflow of cash is a draft . Drafts - a draft involves three parties: the drawer orders the drawee to pay a fixed amount of money to the payee Checks a specialized form of draft that is drawn on a bank and payable on demand; the drawer orders the drawee (bank) to pay the payee on demand (upon the request of the holder) c. Net Present Value d. Discounted Payback - Assuming a 360-day year, the current price of a $100 U.S. T-bill due in 180 days on a 6% discount basis is $97 . Interest = ($100 x 6% x .5 year)[P x I x T]; Price = ($100 – Interest) e. Internal Rate of Return B. Strategies for Short/Long-term Financing Options 1. Cost of Capital 2. Derivatives C. Financial Statement and Business Implication of Liquid Asset Management 1. Management of
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This note was uploaded on 02/01/2009 for the course ACTG 6610 taught by Professor Ward during the Spring '09 term at Middle Tennessee State University.

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Working Capital and Financial Management - Working Capital...

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