MGCR 341 Lecture Notes - Lecture 1: Net Present Value, Savings Account, Arkansas Highway 1

• School: McGill University
• Department: Management Core
• Course: MGCR 341
• Professor: Adolfo De Motta

Document Summary

Finance the valuation of real and financial assets is the central issue in finance investment decisions (capital budgeting, working capital management) financing decisions (capital structure, working capital management) Capital budgeting : decisions on fixed/long term assets on investment projects. Capital structure : decisions on long term liabilities / shareholders" equity on equity mix, debt maturity, and security design. Working capital management : decisions on current assets and liabilities. Cost-benefit analysis: quantifying costs and benefits any decision in which value of benefits > costs, will increase value of firm step 1 convert to common unit. Market value of celine dion tickets : 4 tickets x = Market value of jb tickets : 2 tickets x = . Dion, use to buy jb, and get leftover. Option 2 : not fly (3-1) x 100k = k. Decision not flying gives you k more profit.