0
What are the financial applications of the time value of money?
Wiki User
∙ 16y ago
(a) list various financial applications of the time value of money (b) Explain the components of a discount/ interest rate
Wiki User
∙ 16y ago
Add your answer:
Earn +20 pts
What can erode the value of money over time?
Inflation can erode the value of money over time.
Who coined the phrase you have to spend money to make money?
Seems to be lost. But why worry about a false statement. Consider instead. Time is more value than money. You can get more money, but you cannot get more time.
Why does the value of money save increase over time?
because it earns intrest
A time of decline in general price levels of goods and services and the value of money is stronger?
Deflation is a decline in general price levels of goods and services and a stronger value in money.
A basic time value of money concept is that dollars are comparable only when they stated at the same time period?
True
What time value of money applications are used by commercial banks?
Time, is Money
What is the importance of time value of money in financial decision making?
The importance of time value of money in financial decision making is because money in your today is worth more than the sum at a future date. If you take the money you have today and invest it, you will have more money in the future than if you wait to take the money.
How might you use the principles of the time value of money to your financial benefit?
Time value of money assits in ascertining the most profitable activity amongst choice of investment.
What is financial variables?
A financial variable is valuble assets that has a value of money that can change over time due different environment or economic effects.
What are five different financial applications for the time value of money?
Equipment purchase or new product decision, Present value of a contract providing future payments, Future worth of an investment, Regular payment necessary to provide a future sum, Regular payment necessary to amortize a loan, Determination of return on an investment, Determination of the value of a bond.
Why is the concept of the time value of money a very important financial concept both for organizations and for individuals?
Time Value of Money Time Value of Money is an important concept in financial management. It is one of the important tools used in project appraisals to compare various investment alternatives, and solve problems involved in loans, mortgages, leases, savings, and annuities. A key concept behind Time Value of Money is that a single sum of money or a series of equal, evenly spaced payments or receipts promised in the future, can be converted to an equivalent value today. Conversely, you can determine the value to which a single sum or a series of future payments will grow to at some future date. The former is called Present Value of Cash Flows and the later is called Future Value of Cash Flows.
True or FalseBoth the IRR rule and the accounting rate of return rule take into consideration the time value of money?
accounting rate of return not take into consideration the time value of money as regrading to actual financial statements which prepare on the historical cost
What does time value of money refer to?
The time value of money is the increase in, or future/prjected value of, an amount of money, due to the implied interest earned on it over a period of time.
What can erode the value of money over time?
Inflation can erode the value of money over time.
What are the Uses of time value of money?
Time Value of Money or TVM is a concept that is used in all aspects of finance including: 1. Bond valuation 2. Stock valuation 3. Accept/reject decisions for project management 4. Financial analysis of firms 5. And many others.
Concept of the time value of money?
Time value of money concepts dictates that amount recieved today is not equal to amount receivable at some future time and some amount sometimes interest which is the value of time involved with that money.
What is financial development?
Financial development is an increase in money and resources over time. This increases the ability to acquire and use money through knowledge and experience.
