Description
Introductory finance: time value of money, cash flow analysis. Investment evaluation methods: present worth, annual worth, and internal rate of return. Depreciation models and asset replacement analysis. The impact of inflation, taxation, uncertainty, and risk on investment decisions.
ie. supply and demand 101 + line graphs lol
Definition
The science that deals with techniques of quantitative analysis useful for selecting a preferable alternative from several technically viable ones.
Concepts
Midterm Review Notes
- Chapter 1: Conceptual question (T/F, MC)
- Chapter 2:
- Simple + compounding interest
- Nominal and effective interest rates
- Cash flow diagrams
- Depreciation methods
- Equivalence of cash flows in different times (w/ an interest rate)
- Chapter 3:
- Converting between PW, FW, AW, etc…
- Chapter 4&5:
- Comparing multiple alternatives
- PW: Equal lives, LCM, Study period
- AW (doesn’t matter if lives are equal)
- IRR and Incremental IRR (If you have more than one projects, you need to do incremental IRR, if you only have one project, you can just use IRR and compar eit to the MARR)
- Here, for the midterm, we’ll be given some trial interest rates that we try as our IRR → Interpolation via calculator to solve
- ERR (Approximate the ERR)
- Comparing multiple alternatives