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Financial Managers, Education Funding, Differing Cash, Annuity and Perpetuity, Equally Sized, Future Values, Present Values, Valuing Annuities and Perpetuities, Mortgage Payments, Affordable Payments are some keywords from this lecture of Principles of Finance.
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Chapter 5 As financial managers and pursuing either the maximization of the firm’s stock price or our own material well-being, we need a set of tools to plan for different sets of cash inflows (income, gifts, inheritance, future property or various asset sales, bonuses, retirement proceeds, etc.) and outflows (retirement and education funding, home and auto purchases, durable housing goods purchases, children’s expenses, parent’s expenses, etc.). We need a manner with which we can compare the impact of each of these flows to one-another; we need a way to contrast the impacts of differing cash flows occurring years apart. The material in chapters 4-8 begins to provide those tools.
First, the material from Ch. 4 (review our chapter 4 handout), then on with ch. 5. Key ideas from chapter 4 include all the issues and calculations in table 4.4 on p.106. Similarly, key ideas from ch. 5 include all the issues and calculations in table5.2 on p.129.
These are the tasks you need to be able to perform from chapter 5:
Work with your classmates on the problems from chapters 4 and 5; braced on the tasks above, you are in good shape with your intro to the TVOM and should be well on the way to developing a long and intimate relationship with your BA-II Plus...life is good, isn’t it?