Last week, we had a class were we were given a one day lesson on what Finance really is. I got the feel of what I will be learning next year in my Intro to Finance class and I realized that it isn’t just simply math. I also found it interesting how Finance and Accounting (which is my intended specialization)

One of the key concepts that I captured during the class was the TIME VALUE OF MONEY. The lecture was really mainly about that concept, but even I, who love working with numbers, struggled with this idea! This concept explains how (for example) $100 today will not have the same value as $100 in the future and the reason for this is because the value is affected by the folllowing: inflation, opportunity cost, and purchasing power.

An example that we related to in class, was one of our readings on Facebook. Rob explained to us in more depth about how Facebook overestimated their value which is one of the reasons why their stocks fell by a large amount after the first few weeks. It is interesting how the time value of money is everywhere in the business world and is perhaps one of the most important concepts that we should know in our business careers.

images from:

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Posted: 10|5|12 at 6:52 pm. Filed under: Uncategorized.
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