Respond:
When we talk about the time value of money, there are several sayings. For example:
And of course, the one that your parents used the most!
What are some other saying that you have heard? Time value of money deals with present value, future value, and what other values? As a manger, one must be able to look at the present and know how to get what is desired in the future. In essence how do you turn investments into profits? Managers must look at acceptance criteria. Meaning what are investors willing to accept as a return and in how many years or months. This goes into weighted average cost of capital (WACC). This will be discussed later in the course. But for now, what other factors must managers look at when evaluating future value and present value? A better question is why must managers deal with issues as they arise instead of procrastinating until further notice? A saying that goes with this:
“A stitch in time saves nine” This means it’s better to deal with something now than to allow it to fester or wait and let it get worse and cause more time and ultimately money.
The one thing that affects the time value of money the most is inflation. Why is that? Here is an article on inflation and TVM.
Respond:
The time value of money is used in just about everything in today’s society. It influences decision-making in almost every area of financing.
Corporate managers can use time value of money (TVM) to evaluate if a project will be profitable. One of the methods that can be used is the Net Present value. This is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV analyzes the profitability of the project.
Another method that can be used by corporate managers is profitability index. This method compares projects return to its prospective risk. (1)
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
1. Click on the “Place order tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.