FNAN 303 Lecture Notes - Lecture 1: Capital Budgeting, Sole Proprietorship, Yield Curve

• School: George Mason University
• Department: Finance
• Course: FNAN 303
• Professor: Ben Drissi Messouak

Document Summary

There are a variety of ways that a business entity can be organized: ex: sole proprietorship, partnership, corporation, etc. Key characteristics of a corporation: distinct legal entity that exists permanently. The time value of money is the concept that: a dollar paid or received at one point in time, has a different value than, a dollar paid or received at a different point in time. One way that the value of an amount of money can change is by simple interest. Interest is earned or accrued on the principal or original investment only: no interest on interest . Today (at time 0), you have in an investment that earns simple interest of 6% (. 06) per year. In 2 years from today: you would earn annual interest of x . 06 = , you would have + = .