MGMT 1P93 Lecture Notes - Lecture 4: Net Present Value, Money Market Fund, Capital Budgeting
8 Oct 2016
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Finance: acquiring and using funds to maximize value. How do we get the funds we need: evaluate financial resources, manage working capital, plan financial resources. Historically the value of the firm to its" shareholders but a commitment to meeting social responsibilities contribute to profit. Financial ratios provide insight into financial strengths and weaknesses. Use financial data from balance sheet and income statement. Cash budget- detailed projection of cash flows to determine when cash storage and surpluses will occur. Net working capital- the difference between current assets and liabilities. In it for the long haul: capital budgeting. Capital budgeting- a systematic evaluation of a firm"s major long-run capital investment opportunities. Present value- a dollar next year is not worth as much as it is worth today. When to purchase new machines and equipment. When to build a new factory warehouse or office. When to introduce a new product line.
