In Lesson 3, we have learned that annual percentage rates (APR) represent an annualized expression of the cost of borrowing money, and how to calculate an APR based on a leader's cash flow. The salvage value is also introduced, which presents a positive cash flow for the project. Bonds are a very popular tool for corporations and governments to raise debt capital and we have learned the cash flows of a bond. The old bond rate or return with or without call privileges is also introduced. We also learned the concepts and effects of financial cost and opportunity cost of capital and in the last part we figured out how to evaluate a project(s) using Net Present Value, Benefit Cost Ratio, and Present Value Ratio.
Reminder - Complete all of the Lesson 3 tasks!
You have reached the end of Lesson 3! Double-check the to-do list on the Lesson 3 Overview page to make sure you have completed all of the activities listed there before you begin Lesson 4.