money has time value for the following reasons:
(1) present consumption preference.
(2) uncertainty.
(3) Interest rate.
(4) Inflation.
(5) Deflation.
(6) Gold price.
Inflation can erode the value of money over time.
(a) list various financial applications of the time value of money (b) Explain the components of a discount/ interest rate
How does the time value of money affect the calculation of net present value? What factors should be considered when determining the discount rate for calculating net present value? How do changes in cash flows over time impact the net present value of a project? What is the significance of a positive or negative net present value in evaluating an investment opportunity? How can sensitivity analysis be used to assess the reliability of net present value calculations?
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.
because it earns intrest
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.
Inflation can erode the value of money over time.
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.
The time value of money is irrelevant to purchases paid in full. Money's time value is related to how long it takes to pay off a mortgage or a credit card.
Time, is Money
The disadvantages of time value of money are not knowing the interest rates or growth projections of money. It is impossible to forecast accurately inflation rates.
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There is no specific value. Wasting time or using it inefficiently can cost money, but the amount depends on the type and size of the operation.
(a) list various financial applications of the time value of money (b) Explain the components of a discount/ interest rate
The concept of time value of money is used to compare the investment alternatives. The concept of money is also used to solve the problems that involves mortgages, leases and annuities.
You should not value money very much. It can take hold of your life and you will worry all the time. I value money on a very small scale. And I think you should too.
Time value of money assits in ascertining the most profitable activity amongst choice of investment.