FINALLY I know how to calculate NPV!
Ok, let me back up. I’m currently enrolled in Principles of Finance at Harvard Summer School as the first class in my delve into getting a master’s degree in management. And this is quite different for a gal who has only known literature courses and writing workshops. This has to do with numbers and organizing numbers and doing equations with numbers. But it’s all good – I’m as strong of a right brainer as I am left brainer, so creative writing and data analysis fight for space on my favs list.
Still. A creative writer going into finance class? I admit, I was pretty freaked out about it (ask my friends!). Would it be too difficult? Would I be stumped by it? Would I – who find my worth in doing well in school – be cut down a few pegs and have an identity crisis over too-challenging course content?
Come to find out? This class is pretty simple. HAPPY FACES FOREVER.
I did come in with some familiarity with the words and concepts, having done a year as a scribe in the MBA classroom at HBS. So I knew terms like NPV and IRR and discount rate and Sharpe Ratio and calls and puts – I just didn’t know how to get to them, or what their significance was. Like, I knew if the Net Present Value of a project is positive, you do that project – that was in the cases. Well last week I got to learn how to calculate that. Pretty simple! Just take the present value of the cash inflows and subtract the present value of the cash outflows. (I’ll explain later.) Pretty neat stuff!
And I have to say, I enjoy handing in a problem set where this + this = this, and that’s it, rather than handing in an essay or story that will be graded dependent upon how the grader feels about the essay or story, and if my thesis came through, and if my characters were strong enough, and if I used enough imagery. Even though I got great grades in workshops, I don’t ever believe my stories hit home or were appreciated (they definitely didn’t hit home or were appreciated by the people publishing stuff). It’s nice to be able to know some concrete things and be good at those concrete things, and find a purpose for those concrete things. It’s been a huge transition out of writing from last year, but I think a very good one.