chap004A - Appendix 4A Net Present Value: First Principles...

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Appendix 4A Net Present Value: First Principles of Finance SLIDES APPENDIX ORGANIZATION 4A.1 Making Consumption Choices over Time 4A.2 Making Investment Choices 4A.3 Illustrating the Investment Decision ANNOTATED APPENDIX OUTLINE Slide 4A.0 Appendix 4 Title Slide Slide 4A.1 Key Concepts and Skills Slide 4A.2 Appendix Outline 4A.1. Making Consumption Choices over Time Slide 4A.3 Making Consumption Choices over Time An individual is assumed to be endowed with a set level of income in two periods: Time 0 and Time 1. In addition, the individual can use the financial markets to borrow or lend at the stated interest rate, which allows consumption to be switched between periods. 4A.1 Key Concepts and Skills 4A.2 Appendix Outline 4A.3 Making Consumption Choices over Time 4A.4 Intertemporal Consumption Opportunity Set 4A.5 Intertemporal Consumption Opportunity Set 4A.6 Taking Advantage of Our Opportunities 4A.7 Changing Our Opportunities 4A.8 Illustrating the Investment Decision 4A.9 Illustrating the Investment Decision 4A.10 Illustrating the Investment Decision 4A.11 Illustrating the Investment Decision 4A.12 Net Present Value 4A.13 Quick Quiz
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A-66 CHAPTER 4 Slide 4A.4 – Slide 4A.5 Intertemporal Consumption Opportunity Set For example, income from Time 0 can be invested for future use in Time 1, or, alternatively, income from Time 1 can be used today by borrowing the present value. Slide 4A.6
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chap004A - Appendix 4A Net Present Value: First Principles...

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