The Concept of Present Value
Learning Objective 7
value concepts and the
use of present value
The Mathematics of Interest
A dollar received
today is worth more
than a dollar received
Statement of Cash Flows
The statement of cash flows highlights the major activities
that impact cash flows and hence, affect the overall cash
1. Explain how activity-based costing differs from traditional productcosting methods.
Activity Cost Pools and Pool Rates
Overhead increase rate
Total activity cost pool
JR-14 machine hours
RM-13 machine hours
tied to problem 5-52
Activity Cost Pool
Hazardous waste control
Other overhead costs
Gismos (product G):
Thingamijigs (product T):
Total product cost
Manufacturing overhead budget:
customer profitability study results
Cost Driver Base
Cost Driver Rate
WORKSHEET MGT 11 B SESSION 5 ( CHAPTER 6)
Unit product cost under absorption costing:
Absorption costing income statement
Because beginning inventory was zero and 1,000 units were in ending inventory, fixed
WORKSHEET MGT 11 B SESSION 6 ( CHAPTER 7 and 8)
Allocations to the Other activity cost pool:
Allocations to the Setting Up activity cost pool:
Supervising: $19,100 2,000 batches = $9.55 per batch
Assign overhead cos
Navigating Lifes Financial Decisions
Professor Brad Barber
For an overview of the course, please watch my introductory video:
Prof. Office Hours
3108H Gallagher Hall (Deans Suite on third floor)
MGT 12Y: Navigating Lifes Financial Decisions
Professor Brad M. Barber, Spring 2016
Exam 2, Test Form A
Student ID _
Present Value (PV): PV = FV/(1+r)T
Future Value (FV): FV = PV (
Suppose you opened up a IRA account tomorrow
with an investment of $5,000 and you invested in
only one asset. Which of the following would I be
most likely to recommend you buy?!
a) Gold coins!
b) U.S. Treasury bills!
c) The Vanguard All
Final Group Project
MGT 12Y: Navigating Lifes Financial Decisions
One of the main learning objectives of this class is to provide students with the skills
to evaluate financial products. In this project, students w
Finding a Home
Do you need a buying agent?
Most people recommend hiring a buying agent
Home buying is complicated
Agents deal with mul?ple transac?ons, so have
familiarity with the process and market
May 3: Hand in names for self-formed groups.
Groups should have 5 or 6 students.
I will assign remaining students to groups as
addiEons or newly formed groups.
May 17: Post product choic
Re(rement and Aging
How much can you spend in re(rement?
Financial decisions as we age.
Deferred Income Annui(es
Advanced Direc(ves, Wills, and Trusts
FROM SPENDING AND
The 50/20/30 Budget Plan
Start with your a;er-tax income. Then allocate
to three bins:
50% on must-have expenses
20% on nancial obligaJons
30% on wants
What falls into the three cate
Married ling Jointly
Most common choice
Financially the most astute for 95% of married
Married ling separately
Doesnt aect marriage penalty
Make sense in rare cases (e.g., one
Structure of a DBMS: Query Optimization and Execution, Relational Operators, Files and Access Methods, Buffer Management, Disk Space Management.
Boolean Operators: AND, OR, NOT. Comparisons: <>
Patterns: <attribute> (NOT) LIKE <pattern>; Pattern is a quo
TABLESPACE: a small DB system might need only the SYSTEM ts; its recommended to create additional ts to store user data, indexes, undo segments, and temp seg.
DATA STORAGE HIERARCHY: physical structure (ctrl files, online redo files, data files); logical
The Sanding Department of Richards Furniture Company has the following
production and manufacturing cost data for March 2012, the first month of
Production: 9,120 units finished and transferred out; 3,400 units in ending
work in process that ar
360 View of the Customer
What is it?
A complete picture of your customer from
demographics to purchasing behavior
Why is it useful?
Allows for specific and thorough customer
Example #1: USAA
Business System Map:
The purpose of this document is to provide a reference for the System View framework (or
Map). This reference document has been developed to describe the activities a
Five Fallacies of Analysis
Choice: We can try to get reality to conform to our assumptions OR get our assumptions
to align with reality.
1. Customer is always right Kinda. The customers perspective is always valid to
them, and therefore needs to be respec
Critical Thinking Summary
Critical thinking involves the creation and evaluation of logical arguments. In this context, an argument is a series of
premises which lead to a conclusion.
Types of logical arguments
Induction: An argument that moves from the
The net present value and internal rate of return methods of capital budgeting are superior to the
payback method because they:
a. are easier to implement.
b. consider the time value of money.
c. require less data.
d. reflect the effects of depreciatio
Performance Measurement in
Solutions to Questions
11-1In a decentralized
authority isnt confined to a
few top executives; instead,
decision-making authority is
spread throughout the
Managerial Accounting & Cost
Raw materials that become an integral
part of the pr
Activity Based Costing
ActivityBased Costing (ABC)
ABC is designed to
provide managers with
cost information for
strategic and other
capacity, and therefore,