IOE+201+Notes+10 - IOE 201 Lecture Notes 10 Cumulative...

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11 Cumulative Plots of Income and Spending Cumulative Dollars Tim e Income Spending IOE 201 Lecture Notes 10 Cum. income Cum. spending t at time t at time t Savings if y ( t ) > 0 = Debt if y ( t ) < 0 1 y ( t ) = y ( t ) =
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22 Cumulative Dollars Tim e Income Spending Debt Savings (if > 0) (Cumulative income) (Cumulative spending) = Debt (if < 0) Savings Cumulative Plots of Income and Spending
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33 Cumulative Plots of Income and Spending Cumulative Dollars Tim e Income Spending Savings Debt Interest on Savings Interest on Debt Saver has available cash from savings plus interest on savings Borrower owes cash on debt plus interest on debt
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44 Cumulative Dollars Tim e Cash reserve (funds available) at time t t Income Spending Time for funds to be depleted Cumulative Plots of Income and Spending Loss of income Impact of loss of income
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55 Cumulative Dollars Tim e Income Spending Cumulative Plots of Income and Spending One-time slowing down in spending Low cash reserve Increased cash reserve A one-time cut in spending can improve long-term cash flow
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66 Cumulative Dollars Tim
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IOE+201+Notes+10 - IOE 201 Lecture Notes 10 Cumulative...

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