FINC200 Lecture Notes - Lecture 1: Cash Flow, Sole Proprietorship, Limited Liability
15 Mar 2016
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Document Summary
Finance: the study of pricing and pricing relaionships. *financial management concentrates on value from irms perspecive. Financial markets are successful when they connect borrowers and lenders rapidly and at low transacion costs. Personal finance: focus on expanding and maintaining wealth. Liquidity: how fast something can be converted into cash or sold (ability to connect borrowers and lenders quickly) *when you buy a stock, you have belief it will grow and hope it is undervalued. **you can move between these groups over ime** *type 2 wants to invest in individuals and companies that will be proitable. *type 2 looks to assess the value of future cash lows which is payments for products or services. *if investors lend capital to companies, a successful project should be able to pay back the iniial amount and proit. *firms with high expected future cash low = a safe investment. *credit card aprs for young people are around 15-30% because they are high risk.
