BUS 2204 Factors for Consideration in Capital Borrowing Discussion – Description
Introduction
Chapter 2, “Basic Ideas of Finance,” introduces the basic financial and accounting categories of revenues, expenses, assets, liabilities, and net worth as tools to understand the relationships between them as a way, in turn, of organizing financial thinking. It also introduces the concepts of opportunity costs and sunk costs as more implicit but no less critical considerations.
Chapter 3, “Financial Statements,” continues with the discussion of organizing financial data to help with decision making, and of basic analytical tools that can be used to clarify the situation portrayed in financial statements. This chapter should create enthusiasm for personal financial accounting and the usefulness of accounting statements
Reading Assignment
Read Chapters 2 and 3 of the Personal Finance textbook by Rachel Siegel and Carol Yacht.
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Discussion
Review the material in Chapter 2 on “Basic Ideas of Finance.”
What are the purposes and uses of assets?
What is the main risk of buying or borrowing capital to invest in an asset?
What financial factors should you consider when deciding to borrow capital?
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