CHAPTER 9: CAPITAL BUDGETING
1. Went to bathroom and missed some slides
2. 9.1 NET PRESENT VALUE
3. NET PRESENT VALUE: SUM OF THE PVS OF ALL CASHFLOWS
b. Subtract initial cost as an outflow. (CFo)
i. NPV=CFt/(1+R)^t CFo
CHAPTER 5: THE TIME VALUE OF MONEY
Time value of money- fact that a dollar in hand today is worth more than a dollar promised at
some time in the future.
o Dependent on rate you can earn by investing (interest)
FUTURE VALUE AND COMPOUNDING
Future value (F
CHAPTER 1: OVERVIEW OF CORPORATE FINANCE
1.1 corporate finance and the financial
WHAT IS CORPORATE FINANCE?
Q1> WHAT LINES OF BUSINESS WILL YOU BE IN
AND WHAT SORTS OF BUILDINGS,
Q2. Bring in other owners or borrow money?
CHAPTER 6: DISCOUT CASH FLOW VALUATION
6.1- FUTURE AND PRESENT VALUES OF MULTIPLE CASH FLOWS
FUTURE VALUE WITH MULTIPLE CASH FLOWS
Ex.) deposit $100 today, 8% interest. In one year, you deposit another $100. How much will you have i 2 years?
o Yr1= $108
CHAPTER 10: MAKING CAPITAL INVESTMENT DECISIONS
10.1 PROJECT CASH FLOWS: A FIRST LOOK
Must consider change in firms cash flows and then decide whether they add value to the firm.
First step, deciding which cash flows are relevant
RELEVANT CASH FLOWS
CHAPTER 2: FINANCIAL STATEMENTS, TAXES & CASH FLOWS
THE BALANCE SHEET
Balance sheet- financial statement showing a firms accounting value on a particular date.
o Snapshot of the firm.
o A= L&E
ASSETS: LEFT SIDE
Current vs. fixed assets.
Current = less tha
CHAPTER 11: PROJECT ANALYSIS AND EVALUATION
11.1 EVALUATING NPV ESTIMATES
Investment has positive NPV if market value exceeds its cost.
Biggest problem here is that we cannot actualy observe relevant market value, we can only
This chapter hel
CHAPTER 9: NET PRESENT VALUE & OTHER INVESTMENT CRITERIA
This chapter dives into first key principal of financial management: CAPITAL BUDGETING- What
fixed assets should we buy today?
More than just investing in something, also deals with launching new ma