Reference no: EM133552869

Question 1: Common calculations based on the principles of time value of money (TVOM) include:

• Present value (PV) of a single amount to be received in the future at a given discount rate.
• Future value (FV) of a single amount invested or deposited today at a given compound rate.
• Present value of an annuity (PVA) is the present value of a stream of equal cash flows to be received in the future at an equal interval (e.g., monthly, quarterly, semiannually, annually) and discounted at a given rate of interest.
• Future value of an annuity (FVA) is the future value of a stream of equal cash flows invested at the present at an equal interval (e.g., monthly, quarterly, semiannually, annually) and compounded at a given rate of interest.
• Present value of a perpetuity is the present value of a stream of equal cash flows at an equal interval that lasts indefinitely.

Question 2: Evaluate PV, FV, PVA, FVA, and PV of a perpetuity using an example relevant to you. It may be a professional example (e.g., investing donor assets of a non-profit organization) or a personal example (e.g., investing your retirement assets).

Question 3: Examine how to apply the TVOM principles to capital budgeting techniques, including net present value (NPV), profitability index, and internal rate of return (IRR) in the context of healthcare financial management.