![]() ![]() Sets of cash flows and their factors may be delineated according to customer segments, classification of equipment, and introducing a timeing element, by their maturity. These are simply combinations of sets of cashflows and, of course, their underlying and uncertain factors. Groups of cashflows may also be related to one another structurally through portfolios. The time series of cash flows and their underlying factors in turn have distributions of potential outcomes and also may be related to one another. We see that cash flows evolve over time and may depend on various uncertain factors. This simple vignette about leasing introduces us to the complexities and challenges of financial analytics. Uncertain based on quality of equipment at end of lease (is there a secondary market?).Uncertain based on competitors’ innovations, demand for manufacturers’ products, etc.Also depends on the value of money at monthly forward borrowing rates.Depends on the length and frequency of payment of the lease. ![]() “Show me how we can make money.”įor starters we want to borrow low and sell (leases) high! How? We can define three salient factors: ![]() You had a follow-on idea: build a captive finance company to finance and insure the manufactured product for customers. This would help finance operations and smooth cash flow. The president, call her Nancy, found a new way to make money: lease equipment. Orders arrive “lumpy” at best as some quarters are big producers, others stretch the company’s credit revolver. You work for the division president of an aerospace company that makes testing equipment for high-tech manufacturers. Use R to store and operate (arithmetic and logic) on arrays, vectors, and matricesĪpply R vectors to the calculation of net present value. 9.6 Now for Something Really Interestingīy the end of this chapter you should be able to:.9.5 Simulate… again until Morale Improves….5.4.2 Try this exervise as we get down to business.5.4.1 Gee, that’s very nonlinear of you….5.2.6 And now some more about that bond yield.4.3 Getting Caught in the Cross-Current.4.2.2 Now for somthing really interesting…again. ![]()
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