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Questions I asked on the Reference Desk:

Folding@home

In terms of content, Folding@home has zero information on how the technique works (which is all published); to be a comprehensive article on the subject, it would need substantial descriptions of the algorithms and methodology, and in particular it needs to detail the justification for sampling many short MD trajectories rather than one or a few very long ones, which is the key that makes distributed computing work for these types of calculations. Similarly, the types of problems for which this technique works well should be explicitly pointed out and contrasted to those problems for which it fails because a long trajectory really is needed. There is no academic criticism of the method presented in this article either. --Foundby 10:23, 9 December 2006 (UTC)

Im sorry but what is the question here? If you are only commenting on a certain article, you should do it on that article's talk page, in this case Talk:Folding@home. Shinhan 11:40, 9 December 2006 (UTC)
I agree, that's the proper place to criticize a Misplaced Pages article and request changes. Of course, you can yourself make those changes, that's the whole point of Misplaced Pages. StuRat 12:38, 9 December 2006 (UTC)

Re-phrased Question

How does the Folding@home technique work? --Foundby 23:45, 9 December 2006 (UTC)

It does not seem as if there is be someone here who could tell you more than you can find at the project website, or in the project forums. Judging by the titles of published material which can be downloaded from the site, you may find answers amongst them: "Mathematical Foundations of ensemble dynamics.", "Atomistic protein folding simulations on the submillisecond timescale using worldwide distributed computing.", and "How well can simulation predict protein folding kinetics and thermodynamics?" are but some. Critiques would clearly be a different issue:) -- Seejyb 12:09, 10 December 2006 (UTC)

Financial Models

What are Financial Models? How do Financial Models work? --Foundby 06:58, 19 December 2006 (UTC)

How to make Financial Models?

Proluge

    • It would be useful if you told us what precisely you wanted to model, how detailed the model has to be and whether you want to make a continuous or discrete model, but I can recommend the article on the Black-Scholes Model to get you started. JChap2006 03:53, 21 December 2006 (UTC)

Part 1 - (Precisely what I wanted in the model)

Say we know some items of the Model. In this example:

DECISION ANALYSIS FACTORS: years 0 through 11

  • Real Cash Flow to Owner
  • Present Value of Real Cash Flow
  • Net Present Value of Real Cash Flow:
  • After Tax Real Internal Rate of Return:
  • PROFORMA INCOME STATEMENT: years 0 through 11
  • Annual Gross Rental Income
  • Vacancy and Collection Losses
  • Effective Rental
  • Operating Expenses
  • Net Operating Income
  • Interest Expense
  • Depreciation (cost recovery)
  • Taxable Income
  • Income Tax Liability
  • Net Income After Tax
  • PROFORMA CASH FLOW STATEMENT: years 0 through 11
  • Annual Gross Rental Income
  • Vacancy and Collection Loses
  • Effective Rental
  • Operating Expenses
  • Net Operating Income
  • Debt Service
  • Income Tax Liability
  • Equity Dividend (cash to owner)
  • Down Payment/Reversion
  • Total Cash Flow to Owner
  • Purchasing Power Adjustment
  • Real Cash Flow to Owner

MORTGAGE LOAN AMORTIZATION SCHEDULE: years 0 through 11

  • Balance Owed, beginning of year
  • Annual Mortgage Payment
  • Interest Portion of Payment
  • Amortization of principal
  • Balance Owed, end of year

ANALYSIS OF REVERSION ON SALE:

  • Net Operating Income Projected, Year After Sale (Year 11)
  • Cap Rate At Sale Date
  • Capitalized Value (Sale Price)
  • Transaction Cost
  • Net Sales Price
  • Book Value At Sales Date (cost-dep)
  • Capital Gain ( Net Price - BV)
  • Capital Gains Tax
  • Mortgage Balance Owed
  • Reversion in nominal dollars to owner at sales date
  • What is the next step? --Foundby 05:59, 22 December 2006 (UTC)
    • The first step is to determine what it is you want to model: The expected revenue of a ski lift? When to declare bankruptcy? Is this a "what if" exercise, and what conditions are under your control to vary? Then you determine what quantities figure into the equation (inflation rate, number of baby boomers retiring, whatever). At that point you realize you're never going to be able to find sufficiently reliable forecasts and give up. If, however, you insist on continuing, then the next thing to do is to examine the relationships between all relevant quantities and express them as mathematical equations (revenue = income − expenses; income = quantity × price; expenses = fixed + quantity × variable; that kind of stuff). Possibly you have a time involvement (revenue2006, revenue2008, balance2008 = balance2006 + revenue2008). Then you do the calculations, or solve the equations, or determine the optimal value of something, depending on the nature of the model. Perhaps you could first try something a bit simpler and less ambitious than you seem to have in mind.  --Lambiam 11:36, 22 December 2006 (UTC)

Part 2 - (Net Operating Income Year 1 & Property Valuation)


    • In the first equation you need a minus sign instead of a plus sign. It is basically the equation Net profit = Gross revenue − Expenses. The revenue goes into your wallet, the expenses are paid out of your wallet, and what remains is the net profit. For the second equation, per definition Cap rate = Income / Value. So then by elementary algebra Value = Income / Cap rate. The two factors 100 cancel.  --Lambiam 05:11, 23 December 2006 (UTC)

Part 3 - (Loan Amount & Equity Required)



To answer your specific questions:
  • Loan Amount = Loan to Value ratio X Property Valuation is just a rearrangement of Loan to Value ratio = Loan Amount / Property Valuation, which is a definition of Loan to Value ratio.
  • Equity Required = Property Valuation - Loan Amount is a definition of Equity Required - it says that the purchaser's equity in a property is what is left after subtracting the amount of any loans or mortgages from the value of the property.
If you are asking questions like these, you need to study some financial mathematics, especially around commercial mortgages - you are a long way from constructing the type of complex financial model that you seem to be aiming for. Oh - and moving your question around on the Reference Desk won't get it more attention ! Gandalf61 13:06, 23 December 2006 (UTC)

Part 4 - (Frivilous Comments part)

  • Time for a christmas present to yourself. Get hold of a book on small business accounting. This would go into much more detail of how to drawup ballance sheets and cash flows than we will be able to do justice with here. The cost of purchace will really pay in the long term. Do not rely on[REDACTED] for financial advice! --Salix alba (talk) 12:14, 23 December 2006 (UTC)
    • Whatever happened to You can give the gift of knowledge by donating to Wikimedia?--Foundby 12:58, 23 December 2006 (UTC)
  • I'm sorry to hear that. Maybe a library in your vicinity has helpful books. I'm also sorry to see that you considered Salix' or my responses frivolous. I can assure you they are meant to be entirely serious.  --Lambiam 12:34, 24 December 2006 (UTC)

Part 5 ( 1 + i )

From User:Gandalf61 External Link:


Anyone who has studied business has at least a passing familiarity with “time value of money” formulas. Yet while many people can comprehend explanations of loan repayment schedules or retirement savings accounts, or even use financial calculators, their level of time value understanding may not include any sense of where the time value formulas come from, or how the various time value applications are related. This brief article presents a derivation of all of the standard (and some less well-known) time value of money formulas from the future value of one dollar factor.

Basic future value applications are easily understood at an intuitive level. Suppose you have $1,000 in an account today. If this amount earns a rate of return of 10% for a year, the balance grows to $1,100 (the original $1,000 plus $100 in earnings). Symbolically, this time value adjustment can be represented as

(1) PV0 (1 + i) = FV1 ,

an equation in which PV0 is the $1,000 in the present, i = .1 or 10%, and FV1 is the $1,100 future amount one year hence.

This process can be repeated, in the sense that we can now view the $1,100 as the initial balance in a second future value analysis. If this amount grows at 10% for one year, the account balance grows to $1,210 by the end of that second period. Symbolically,

(2) FV1 (1 + i) = FV2 .

Substituting equation (1)’s representation of FV1 into equation (2) reveals how the initial present value can be transformed into a future value two years later:

PV0 (1 + i)(1 + i) = FV2 or

(3) PV0 (1 + i)2 = FV2 .

Generalizing for any number of years n, we have

(4) PV0 (1 + i)n = FVn .

Thus, we have discovered the first of the standard time value of money factors, the future value of one dollar factor: FVFn = (1 + i)n .


  • In formula 1. PV0 (1 + i) = FV1, how did they come up with 1 + i ? --Foundby 16:41, 24 December 2006 (UTC)
i is the interest rate - in the example it is 10% or 0.1. So the interest earned on an initial balance of PV0 in one year is PV0 times i. But you also have your capital of PV0 at the end of the year. So the future value of your investment at the end of year 1, FV1, is given by
FV1 = Capital + Interest = PV0 + PV0.i = PV0(1+i)
Take a look at our article on time value of money. Gandalf61 18:37, 24 December 2006 (UTC)

Part 6 - (Mortgage Loan Constant)

    • Mortgage Loan Constant is the annualised ratio of the loan repayments to the initial amount of the loan - it looks like an interest rate, but it is higher than the interest rate of the loan because repayments also include capital repayments as well as interest. This link might help, although it is quite mathematical.Gandalf61 13:06, 23 December 2006 (UTC)


    • If you just take the ratio of a single loan repayment to the initial value of the loan, you get very different figures if the repayments are, say, monthly than if they are, say, quarterly. To establish a common yardstick you need to annualise the ratio by calculating an annual equivalent rate. For example, if your monthly repayment is 1% of the original loan value, the annual equivalent of 1% monthly is (1.01)^12 - 1 = 12.68% (approximately), so the Mortgage Loan Constant would be 12.68%. (Feel free ask any follow up questions on my talk page). Gandalf61 10:25, 26 December 2006 (UTC)
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