What is concept of time value of money

Assignment Help Business Management
Reference no: EM132338734

What is the concept of time value of money?

The time value of money concept states that cash received today is more valuable than cash received at some point in the future. The reason is that someone who agrees to receive payment at a later date foregoes the ability to invest that cash right now. The only way for someone to agree to delayed payment is to pay them for the privilege, which is known as interest income. Time value of money is the concept that the value of a dollar to be received in the future is less than the value of a dollar on hand today (Muda & Hasibuan, 2018). One reason is that money received today can be invested thus generating more money. Another reason is that when a person opts to receive a sum of money in future rather than today, he is effectively lending the money and there are risks involved in lending such as default risk and inflation.

References

Muda, I., & Hasibuan, A. N. (2018). Public Discovery of the Concept of Time Value of Money with Economic Value of Time. In Proceedings of MICoMS 2017 (pp. 251-257). Emerald Publishing Limited.

Reference no: EM132338734

Questions Cloud

Create professional caliber project plan : Create a professional caliber project plan in the format of your choice that outlines your team's
What is groupthink and how did it affect the challenger : Describe two-party, coalitions, and multi-party negotiations. What is "groupthink," and how did it affect the Challenger?
When you discover the ideal business for sale by the founder : Suppose that you and a friend have recently graduated from college when you discover the ideal business for sale by the founder,
What is the difference between wealth max and profit max : What is the difference between wealth max and profit max?
What is concept of time value of money : What is concept of time value of money? The time value of money concept states that cash received today is more valuable than cash received at some point future
Why understanding of time value of money is important : Why understanding of time value of money is important? What you are saying is one of the application of time value ofmoney. What is the concept?
How can training help companies deal with these forces : Describe the forces affecting the workplace and learning. How can training help companies deal with these forces?
Continuum of severity model regarding ethical practices : Create a continuum of severity model regarding ethical practices in organizations and discuss your model. How did you arrive at the model you created?
What are the major elements of strategic planning : What are the major elements of strategic planning? What elements of strategic planning are present in the case study?

Reviews

Write a Review

Business Management Questions & Answers

  Program that takes as input four times in the format

Program that takes as input four times in the format h:m:s and prints them out in a tabular format.

  Regression method and naive approachwill you please review

regression method and naive approachwill you please review my answers to these 2 multiple choice questions and let me

  Create a hypothetical marketing campaign

Create a hypothetical marketing campaign that uses what you've learned about the CRM approach. Describe how you might apply insights about developing long-lasting relationships with customers to retain or reactivate past visitors.

  Explain how will the company respond to the media report

If MKD adopts an obstructionist stance, how will the company respond to this media report? Provide one supporting fact.

  Prepare a presentation advocating for the development

Divide into two teams. One team must prepare a presentation advocating for the development of a standardized global code of conduct.

  Origin and motivations of the luddites

Can you explain the origin and motivations of the Luddites of the early 19th century?

  Refiners do to the supply of gasoline

Suppose the market price of fuel oil increases (preparing for the winter demand), what will refiners do to the supply of gasoline.

  Demand curve for generic advertising

Suppose that each team in a league has a demand curve for generic advertising (a league-wide, non-tem-specific campaign) equal to Q = 1000 - 5p. If there are 20 teams in the league, and ads cost $175 each, how many ads will the teams want to purch..

  Guide managers in decision making

However, the evidence indicates that few people rely on a company code of ethics in their decision making. Are the codes valuable?

  Health care financing and economic trends and forces

Compare the three(3) current health care financing and funding models (i.e., employee based, government based, and individual based) used with the health care delivery system of the United States.

  How should a company assess readiness for learning include

how should a company assess readiness for learning? include characteristics of both the employee and the work

  Evaluate how efficiently these goals were accomplished

Evaluate how efficiently these goals were accomplished. How would this pertain to a person that works in the marketing department of a wine company?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd