Discussions
Cash Flows From Working
It may surprise you that there are cash flows associated with holding a job. Using the examples provided in Chapter 6, construct a simple cash flow statement and payback calculation for when your job expenses will be covered for employment you currently have or have had in the past. Include in your cash flow statement:
Expenses associated with working
Any initial investments
Taxes
Present and Future Values, and Expected Returns
We examined two important topics in finance this week: (a) present and future values and (b) security valuation.
Critically reflect on the importance of present and future values. What factors must be considered when calculating present and future values? What other qualitative factors play into present and future value decisions? Perhaps you have opportunities in your professional life to use present and future values. What are some real or potential applications of these concepts?
We also looked at expected returns. Why do bond values go down when interest rates go up? Is this true in the opposite direction?