Describe the fundamental concepts in financial management

Assignment Help Operation Management

Reference no: EM132172271

Fundamental Concepts in Financial Management

Assume that your family is planning to purchase a car. You find the following options on the car dealership lot-equitable in price and of your interest:

A red, two-seater convertible sports car

A sport-utility vehicle

A minivan

To make the buying decision, you must evaluate the available options to ensure that your investment will pay off in the long run.

While it may be tempting to purchase the sports car, it may not fulfill the requirement of your family-if there are four members in the family, the sports car would not have sufficient room for all of them.

Hence, the sports car is not a choice to consider here. However, further considerations will be required to decide between the sport-utility vehicle and the minivan-the initial price or investment and the future costs (i.e., fuel costs, maintenance costs, and insurance costs).

Similar to this scenario, the managers of a company expend a significant amount of time and effort in determining what projects should be pursued as well as the right financing mix for these projects. This module reviews the tools and techniques that management uses in making important decisions.

Module Readings:

Complete the following readings early in the module:

Module overview

From your course textbook, The portable MBA in finance and accounting, 4th, read the following chapters:

Discounted Cash Flow

Capital Structure

Planning Capital Expenditure

From the Internet:

Financial sites to review and become familiar with:

Moneychimp: learn Stock Investing, Index Funds, Valuation Models, and more.

The Concise Encyclopedia of Economics

Investopedia - Educating the world about finance

Calculating the Weighted Average Cost of Capital (WACC)

miniwebtool.com's CAPM (Capital Asset Pricing Model) Calculator

Module Assignment Overview: In this module's assignment, you will discuss specific situations where the time value of money is applied in personal and professional situations. You will also discuss risk and risk aversion.

Assignment: Discussion-Time Value of Money

Time value of money analysis has many applications-both personally and professionally. The calculations can be performed using Microsoft Excel, factor tables, or a financial calculator to help make informed decisions, such as planning for retirement, loan decisions, and capital projects.

The concept of time value of money helps managers value cash flows and assess risk within the organizations.

In this assignment, you will discuss specific situations where the time value of money is applied in personal and professional situations.

Tasks:

Share any professional and personal decisions you made in which the concept of time value of money was utilized and include the following:

The specific decision for which you used time value of money.

The manner in which you applied the concept.

The tools you used to complete the analysis, including the timeline.

An explanation of how using the concept helped you reach a more accurate decision than if time value of money had not been utilized.

Your response should consist of a minimum of 300 words and demonstrate critical thinking and analysis.

Reference no: EM132172271

Questions Cloud

Conduct a set of interviews with experts in a negotiation : Conduct a set of interviews (two) with experts in a negotiation context specific to what you would like to do in the future.

Why you selected the pricing strategy you did for business : It is very important to make sure that you align your pricing strategy with your target market and branding strategy.

How your own theories of health services administration : Assess how your own theories of health services administration have matured or changed since the beginning of this course.

Distinguish between consumer surplus and producer surplus : Distinguish between consumer surplus and producer surplus. How do these concepts relate to a country's economic welfare

Describe the fundamental concepts in financial management : To make the buying decision, you must evaluate the available options to ensure that your investment will pay off in the long run.

What was your ig or iig term course : What was your IG or IIG term course? Reflect on the connection between knowledge or concepts from this courses and how those have been or could be applied.

Create naming conventions for each entity and attributes : Propose an efficient data structure that may hold the tour operator's data using a normalization process. Describe each step of the process that will enable.

What is first-year relative cash flow : What is the total of present value for all five years? Should the factory be purchased? Why or why not - What is first-year relative cash flow

Forest and the trees in terms of organizational structure : Discuss the relationship between the forest and the trees in terms of organizational structure and organizational culture.

User Account

All Pages