Class Notes Appendix A - The University of Texas at Austin...

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The University of Texas at Austin McCombs School of Business, Business Foundations Program ACC 310F: Foundations of Accounting Class Notes – Appendix A Overview Someday you may decide to buy a house. If so, it's a commitment that should be considered carefully because if you have to borrow money to purchase the house, typical loans have terms in the decades. In this lesson, you'll learn how companies evaluate the implication of long-term decisions in relation to the value of money. Source Document (from Chapter 1) Time Value of Money Future Value of $1 Future Value of an Annuity of $1 Present Value of $1 Present Value of an Annuity of $1 Time Value of Money Calculations Future Value of $1 PV x FV factor = FV Present Value of $1 FV x PV factor = PV Future Value of an Annuity of $1 Annuity Amount x FVa factor = FVa Present Value of an Annuity of $1 Annuity Amount x PVa factor = PVa Page 1
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Capital Budgeting (not in Textbook) Outcome is uncertain. Decision may be difficult or impossible to reverse.
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Class Notes Appendix A - The University of Texas at Austin...

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