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What is meant by the concept of time value of money

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Question - On January 1, 2018, PT XYZ sold 50 trucks at a price of Rp.30,000,000,000 and had accumulated depreciation of Rp. 20,000,000,000 on the date of sale. PT XYZ received debt securities worth Rp. 15,000,000,000 due on January 1, 2023. There are no known market prices and non-interest-bearing notes. The interest rate applicable to this similar promissory note on January 1, 2018 is 5%.

a. Explain what is meant by the concept of 'time value of money' and how it affects on business conducted by companies?

b. What is the value of the non-interest-bearing note received by the company?

c. Did the company get profit or loss from the transaction? How much profit or loss from truck sales should the company record from the data above?

Reference no: EM132538091

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