Join Jim Stice for an in-depth discussion in this video Introducing capital budgeting, part of Finance Foundations.
- Okay, I have here a special little machine.…- Okay, what does it do?…- It creates money.…- Money? How much money?…- This little machine here creates exactly…one US dollar per year, completely legal.…The dollar pops out the hole at midnight…on December 31st every year.…- Now are you sure this is legal?…- Absolutely. Now the question is,…how much would you pay me to buy this dollar bill machine?…- How long's it going to last?…- That's the good news.…
This little machine is guaranteed to last one billion years.…Yes, in it's useful lifetime this machine will produce…a total of one billion dollars.…- A billion dollars? Wow.…- So how much will you pay me for this machine?…This billion dollar machine.…Will you pay me a billion dollars for it?…- No, I'm not going to pay you a billion.…- Why not?…You'll completely recover your…billion dollar investment over the life of this machine.…You pay me a billion dollars for it now…and you'll get your billion dollars back.…
- Yeah, but I'll have to wait a billion years.…Plus a dollar now is worth a lot more…
Jim Stice
Earl Kay Stice
Released
10/20/2014- Understanding financial statements
- Managing finances in the short term
- Analyzing risk and return
- Obtaining short-term and long-term financing
- Understanding the stock and bond markets
- Comparing the Facebook and Microsoft IPOs
- Working with financial institutions
- Using capital budgeting
- Creating simple personal saving and investment plans
Skill Level Appropriate for all
Duration
Views
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Introduction
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Welcome1m 20s
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1. What Is Finance?
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Introducing finance1m 47s
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Finance inside of companies2m 25s
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Finance outside of companies2m 19s
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2. Understanding Financial Statements
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The balance sheet3m 24s
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The income statement2m 34s
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The statement of cash flows4m 14s
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Widely used ratios11m 50s
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3. Short-Term Financial Management
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The operating cycle2m 49s
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Cash management4m 15s
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Internal controls3m 44s
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4. Risk and Return
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Introducing risk and return1m 42s
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What is risk?5m 1s
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Why we don't like risk5m 32s
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Beta6m 9s
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Risk-free rate2m 20s
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Equity risk premium2m 50s
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5. Obtaining Long-Term Financing
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Does capital structure matter?11m 17s
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Cost of capital9m 25s
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6. Understanding Securities Markets
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Stock and bond markets7m 49s
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IPOs: Microsoft and Facebook8m 25s
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7. Financial Institutions
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Traditional banks6m 13s
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Investment banks3m 11s
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Investment funds9m 27s
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Insurance companies2m 55s
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8. Capital Budgeting
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Capital budgeting overview3m 20s
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9. Bonus: Personal Financial Planning
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Conclusion
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Video: Introducing capital budgeting