ECON 282 Study Guide - Final Guide: Compound Interest, Discounted Cash Flow, Effective Interest Rate
21 Jun 2017
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Date and time: august 11, 12:00 3:00. Coverage: the final exam is cumulative, with more weight given to new materials. Office hours: wednesday august 10, 10:00 11:00 in wmc 1676. Exam regulations: there will be no washroom breaks. Please use washroom before the exam starts: switch cell phones off & put in bags (not on your person), no watches. All wrist watches must be left in your bags: put all belongings in bags and leave bags at the front of the room. Use a time line to show the timing of cash flows. Understand the relationship between present value and future value. Understand why we discount future cash flows by its opportunity cost. Use npv rule to make investment decision. Use rate of return rule to make investment decision. Understand fisher separation theorem and relate it to the financial decision of a company: discounted cash flow valuation. Differentiate the regular annuity (aka annuity immediate) and the annuity due.
