Happy Returns
Finance Fundamentals
Time Value of Money
Financial Statements
100

= C × (1+R)T

 

What is Future Value?

100
The four basic areas that financial topics are grouped into.
What is Corporate Finance, Investments, Financial Institutions and International Finance
100

Valuation approach that calculates the present value of a future cash flow to determine the value today.

What is discounted cash flow (DCF) valuation?

100
Shows Assets, Liabilities, and Equity
What is a Balance Sheet
200

The amount of time it takes for an investment or project to recover its initial cost (through the cash flows that are generated).

What is payback period?

200
This individual is usually the top officer of the firm, sometimes called the Chief Financial Officer (CEO) or something else.
What is the Financial Manager
200
interest earned on both the initial principal and the interest reinvested from prior periods.
What is compound interest
200
The Financial Statement that shows Revenue and Expenses
What is the Income Statement
300

The is the annual rate quoted for car loans, which is lower than the effect annual rate. 

What is annual percentage rate (APR)?

300
The three main forms of business organization
What is Sole Proprietor, Partnership and Corporation.
300
the rate used to calculate the present value of future cash flows.
What is discount rate
300
Expenses charged against revenues that do not directly affect cash flow.
What is Depreciation
400

The discount rate that sets NPV = 0.

What is the internal rate of return?

400
Goal of Financial Management
What is maximize the current value per share of the existing stock.
400

The current value of future cash flows discounted at the appropriate discount rate

What is Present Value

400
This is what EBITDA stands for.

What is earnings before interest, taxes, depreciation & amortization?

500

( C / R ) × [ 1 - (1+R)-T ]

What is the annuity formula?

500

These financial markets function as markets for debt and equity.

What are Primary and Secondary Markets?

500

This accounts for next-best-alternative return that investors could obtain if the didn't invest in a particular firm.

What is the opportunity cost of capital?

500

This explains why we subtract depreciation before we calculate taxes, and then add depreciation back.

What are depreciation tax shields?
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