Week 8 Notes (Week 7 was Fall Break)
Week 8 Notes (Week 7 was Fall Break) FIN 3010-001
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This 0 page Class Notes was uploaded by Anna Notetaker on Monday November 2, 2015. The Class Notes belongs to FIN 3010-001 at Middle Tennessee State University taught by Gregory Nagel in Fall 2015. Since its upload, it has received 17 views. For similar materials see Business Finance in Finance at Middle Tennessee State University.
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Date Created: 11/02/15
Cash ow from assets involve three components which are operating cash ow capital spending and change in the net working capital Cash ow from assets cash ow to creditor cash ow to stockholders Cash ows between the frim and the nancial markets a Firm issues securities to raise cash b Firm invests in assets c Firm s operations generate cash ow d Cash is paid to government as taxes Other stakeholders may receive cash e Reinvested cash ows are plowed back into rm f Cash is paid out to investors in the form of interest and dividends The total of the cash ow to creditors and stockholders consist of operating cash ow capital spending and the change in the net working capital Operating cash ow is the result from the rm39s day to day activities of producing and selling Capital spending refers to the net spending on xed assets The change in net working capital is the amount spent on the net working capital Formulas Future Value Formula FV PV 1 rquott As t increases FV increases as well Present Value Formula PV FV 1 rquott As t increases PV decreases as well As interest rate goes up so does the risk Discount Rate Formula R FV PVquot1t 1 Number of Periods Formula T lNFVPV N1 r How to Use the Calculator Symbols for the Calculator FV Future Value PV Present Value One must be negative between FV and PV IY Period Interest Rate r N Number of Periods Texas Instrument BAII CY must equal 1 for the W to be the period rate Cy 1 default on new BAII Interest rates must be entered as a percentage not a decimal PMT 0 for chapter 4 only Clear the registers before each problem Press 2nCI then CLR TVM Or reenter each eld Set number of decimals places to display Press 2nCI Key Press Format Key Enter Desired Decimal Places Press Enter to set the Displayed Choice Be sure the quotpayment per periodquot or PY is set to 1 Press 2nCI key Press PY above IY Enter 1 Press Enter Press CEC To set END for cash ow occurring at the end of the period Press 2nCI key Press BGN above PMT This is a toggle switch The default is END To change to BEGIN hit 2nCI and SET to go back and forth NOTE BGN will be displayed at the top right of the screen when the calculator is in BEGIN mode When in END mode this indicator will be blank