Plan for today (13 July)

Introduce time value of money (TVM) by illustrating how TVM can help us understand why maximizing shareholder wealth is an appropriate corporate objective.

Various examples of the 4 learning objectives for chapter 5 (see next page):

Chapter 5 Learning Objectives

How Financial Markets Reconcile Preferences forCurrent vs. Future Consumption

How Financial Markets Reconcile Preferences forCurrent vs. Future Consumption

Simple TMV problems using Financial Calculator

Time value of Money in Excel

Rule of 72 from Khan Academy

7

Rule of 72 and its generalization

See Rule of 72 Worksheet.

Future Value and Present Value Tables

See http://bit.ly/tvmtables (password is “baylorbears”)

Next, go to http://bit.ly/tvmspreadsheet and replicate the information contained in http://bit.ly/tvmtables.

Summary of Time Value Calculations

Summary of Time Value Calculations