BUSSPP 0200 1st Edition Lecture 4Outline of Last Lecture I. Organizations & FirmsII. EnvironmentsIII. Concepts of Management IV. Goals & StakeholdersOutline of Current LectureI. Goals & Stakeholders (Review, same as last lecture)II. Accounting ProfitIII. Economic Profit IV. Beginning Chapter 2 – Transactions & Markets Current LectureI. Goals & StakeholdersA. Concept 1. In micro: one goal 2. in business: in practice, multiple goals B. Why?! 1. Stakeholders: any party with a vested interest in the firm (somehow the firm’sfate and the stakeholder’s fate are intertwined) a. Types (all have different interests): -Employees -Owners -Debt holders -suppliers -Customers -Neighborhoods/localities -Governments II. Accounting profit A. fixed B. backward – looking/historicalThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.C. Opportunity costs not consideredD. Time-value of money not considereda. Time-value of money: value of the dollar over time (inflation/deflation)E. no cost of capital a. cost of capital: every dollar invested has a cost (i.e. interest) F. Reporting1. 10-k form: official annual report (required by law) 2. 10-q report: quarterly report (estimate, proforma) 3. national accounting standards III. Economic profit A. indefinite B. historical & futuristic (estimate) C. Opportunity costs considered D. Time value of money considered E. Cost of capitalF. No reporting IV. Chapter 2 – Transactions & Markets A. Transaction: Exchange among parties, almost always assisted by 3rd parties1. Parties: a. Buyersb. Sellers c. 3rd Parties i. brokers: bring buyers and sellers togetherii. infrastructure providers: 3rd parties that provide services that increase the efficiency of transactions-modern commerce would not exist without them 2. Types of transactions(all independent)a. Legal/illegal b. Domestic/international i. currency risks ii. legal issues between countriesiii. language barrier c. market/transfer i. market: firm and another part of its environmentii. transfer: within the firm’s infrastructure d. Purchase/barteri. purchase: $ for goods/servicesii. barter: goods/services for goods/services- cannot determine buyer/seller e. Spot/future i. spot: immediate completion of the deal, continuous action ii. future: separation between striking/completing the deal both in time and physicality 3. Market: arena within which similar types of transactions occur a. Types: i. Physicalii. virtual (massive increase)b. propertiesi. Stability: most markets, most times, in developed economies, are stable -price-availability-
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