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Finance Theory I - Week 2

Chapter 2 - Value - How to Calculate Present Values

How are asset values determined? Is the present value positive? - The value today exceeds the investment that is required A positive net present value implies that the rate of return on investment is higher than your opportunity cost of capital.
Perpetuity investment - steady stream of cash flows forever Annuity investment - steady stream for a limited period
Money has a time value - $ x (1 + r)t Value of investment 1 year $ x (1 + r) 2 year $ x (1 + r)2
in year 2 you earn interest on both your initial investment and the previous year's interest - compound interest

Calculating Present Values
How much do you need to invest today to get a certain amount at the end of a year?

Kahn Academy

Alanis Academy


Lecture

Lecture starts at 19:17
Professor continues to mention that we won't understand everything right away and that we have to build knowledge. It will all come together and we will have an epiphany of understanding.

Cash Flow - money that is c…

Finance Theory I - Week 1 - Complete

Chapter 1 - Value - Goals and Governance of the Firm

Corporations invest in real assets
-generate cash inflows and income
-tangible - machinery, buildings
-intangible - brand names, patents

Financial manager faces two questions
-what investments should the corporation make - involves spending money
-how should it pay for those investments - involves raising money

Secret of success is to increase value of the corporation and stock price
-how to do it?
-how well all managers and employees work to increase value
-identify risks and make sure they are managed properly

Corporation can
-invest in new assets
-or give cash back to shareholders

Opportunity cost of capital that shareholder contribute
-can the corporation add value and earn a higher return than shareholders can earn for themselves

Reoccurring themes
-Maximizing value
-Opportunity cost of capital
-Crucial importance of incentives and governance

Financial asses or securities
-corporation sells claims on the assets and on the cash flow that they will ge…

Finance Theory I

MIT OCW Finance Theory I

This course introduces the core theory of modern financial economics and financial management, with a focus on capital markets and investments. Topics include functions of capital markets and financial intermediaries, asset valuation, fixed-income securities, common stocks, capital budgeting, diversification and portfolio selection, equilibrium pricing of risky assets, the theory of efficient markets, and an introduction to derivatives and options.

Video Lectures





Introduction to Lean Six Sigma Methods - Syllabus

Course Description
This course introduces the fundamental Lean Six Sigma principles that underlay modern continuous improvement approaches for industry, government and other organizations. Lean emerged from the Japanese automotive industry, particularly Toyota, and is focused on the creation of value through the relentless elimination of waste. Six Sigma is a quality system developed at Motorola which focuses on elimination of variation from all processes. The basic principles have been applied to a wide range of organizations and sectors to improve quality, productivity, customer satisfaction, employee satisfaction, time-to-market and financial performance. The curriculum corresponds to 24 hours spread over 3 days. The almost 600 slides given to the students, video tapes of many of the lectures, and some of the active learning exercises are available on MIT OpenCourseWare. Fifty percent of the contact hours involve hands-on exercises and simulations, most of which are not available fro…

Week 11 - Key Role of Leadership and Management

Readings

"Innovator's Solution" Chapters 7, 10, and Epilogue - notes

"Who Says Elephants Can't Dance" Parts III and IV - notes

Lecture

IBM’s e-business Strategy: Organizational and Cultural Issues
- Build a company-wide virtual organization 
  - For transformative, company-wide initiatives, it is best to have a relatively small full time core team coordinating activities across the different functions in the organization 
  - After the initiative has taken hold in the company, the virtual team should dissipate and its functions integrated back into the overall organization 
- Be inclusive of as much of organization as possible 
  - Other parts of the organization will likely not support the new disruptive initiatives at first, especially if they are not involved and feel excluded 
  - The more everybody feels part of the new initiative, the more they will support it and help it succeed
- Sell the strategy “outside-in” 
  - People will believe what they read in newspape…

Week 8 and 9 - Guest Lecturers - Complete

In September 1995 Christopher McCormick launched LL Bean's website.
A better image than mass market catalogs they also scrapped their CD Rom. They were the first company to sign on to IBM's Net.Commerce a secure way for customers to place orders online. One of the earliest adopters of the new media channel of the internet.  



Chris Wall - Copywriter with specialization in computer and tech accounts at an ad agency Ogilvy

Listen Here

A best clip is at 1:26:40

All the ads he shows as examples are cut due to copyright, but I found some of them here

Notes from lecture:
The whole notion of technology was what his ad agency created for IBM and then sequentially Motorola, DuPont, and other science and technology companies.

The culture was that you wanted to be seen as embracing the technology because you believe that the future is going to be better.

Technology is faith based and therefore is hard to articulate and make interesting.