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Why is the concept of the time value of money so important

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Problem a. Assume that you will receive RM2,000.00 each year for 5 years. If you require a 12 percent rate of return, what is the present value of these cash flows?

Problem b. If you will receive RM1,000.00 a year in years 1 through 5, and RM3,000.00 a year in Years 6 through 8. If you require a 10 percent rate of return, what is the present value of these cash flows?

Problem c. If you received today RM1000.00, what is the future value of 5 years evaluated at a 15 percent interest rate?

Problem d. Why is the concept of the time value of money so important to financial managers?

Reference no: EM132791687

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