# FIN 300 Chapter Notes - Chapter 1-5: Promissory Note, Asset Turnover, Fixed Asset

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2 Nov 2017
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## Document Summary

Valuation principle: fair value of an asset given by its competitive market price. > law of one price: in competitive markets, same goods=same price. (used 2 value derivatives, cross rate r currencies etc) Higher the compounding freq, the more the real rate is understated. Pvaa is present value annuity in advance which means it"s paid at beginning rather than end. For a lease it"s at beginnings, a loan it"s at the end. Ex: x pays semi monthly on a 5-year loan at an ear of 9%. Fv: 0 (you want loan to be paid off) p/y: 24 c/y: 1. C/y = p/y = number of payment periods. Ex: a wants to buy computer on monthly installments, a is offered a 2 year loan with. N: 20*26 pv: 300,000 pmt: -1000 fv: 0 p/y: 26 c/y: 2. : monthly periods & 6% mr (r=(1+mr/2)^2/m 1 n:12/2 (m/2) Always set the right settings! (menu tvm press shift & setup)