Future and Present Value

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Future and Present Value
List some of the pros and cons of retiring debt early. Some firms decide to retire debt early. Generally, it seems like…

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Future and Present Value

Future and Present Value

HSM 340 Discussions Week 5 All Students Posts 33 Pages 

List some of the pros and cons of retiring debt early. Some firms decide to retire debt early. Generally, it seems like a good idea. Let’s discuss how and when it is done. What do we need to consider when the decision is made? Interest rates, the availability of excess cash play a major role.

When does it make sense to retire debt early? Retiring debt early needs to be always evaluated. For businesses it has to be supported by calculations and math. When the debt is paid off, how can they buy assets? To finance the purchases, there has to be some debt incurred. So, retiring the debt means there is no prospective investment and in this case, there is no need or no point to invest. Do you agree?…