I have a finance exam in three hours, so naturally I am just reading the textbook for the first time now. I’m learning about discounted cash flow valuation and future value of cash flows and I come to the following problem:
“Finding the Payment: Suppose you wish to start up a new business that specializes in the latest of health food trends, frozen yak milk. To produce and market your product, the Yakkee Doodle Dandy, you need to borrow $100,000. Because it strikes you as unlikely that this particular fad will be long-lived, you propose to pay off the loan…”
Surely there was a more probable product they could have chosen. I mean, come on, do yaks even produce milk? Is it biologically possible to obtain milk from a yak? Does a yak even have udders? More importantly, would one ever want to milk a yak? And even if you answered yes to the previous four questions, why would you want your milk frozen? That’s just disgusting.