GNG2101 Lecture Notes - Lecture 13: Opportunity Cost, Interest, Net Present Value

• School: University of Ottawa
• Department: General Engineering
• Course: GNG2101
• Professor: Patrick Dumond

Document Summary

Economics : factors that determine the production, distribution, and consumption of goods and services. Balance sheet: continuously updated of financial status of a company. Assets (things of value): if you can sell it it has a value. Long-term assets: not planning on selling anytime soon (buildings) Current assets: likely to be turned into cash, or converted into an expense. Current: paid out during course of year. Equity = assets - liabilities; house bought for 100k, in 2 yrs its 200k. On the balance sheet we enter depreciation instead of full value. Example: bought machine for 100k with a 10 year life, so in balance sheet we write 10k lost because the machine can still be sold for 90k. Losses: loss on sale of long term assets. Money that flows, cash in and out of the business. Every time the amount increases, you gain interests on your interest!