Why does money have time value, Financial Management

Assignment Help:

Why does money have time value?

Positive interest rates point toward that money has time value.  When one person lets one more borrow money, the first person needs compensation in exchange for reducing current consumption. The person who borrows the money is ready to pay to increase current consumption.  The necessary rate of return on an investment reflects the pure time value of money, an amendment for expected inflation, and whichever risk premiums present.

 

 

 


Related Discussions:- Why does money have time value

Expected value application in finance - project evaluation, Project Evaluat...

Project Evaluation The expected value calculations are crucial to project investment decisions. The following example explains the use of probabilities in project evaluation.

Explainthe principles of banking and finance, An introduction to the princi...

An introduction to the principles of banking and finance It covers a broad variety of topics using an economic perspective and aims to give a general background to any student

Calculate the exchange exposure faced by the u.s. company, A U.S. company h...

A U.S. company holds an asset in France and faces the subsequent scenario:     State 1 State 2  State 3  State 4

Primary market, Primary Market In an economy, at a given point of time, ...

Primary Market In an economy, at a given point of time, there will be people/entities called savers the surplus units, whose current income exceeds their current expenditure whi

Describe the main elements of working capital management, Question: (a)...

Question: (a) Describe the main elements of Working capital management? (b) Belle Rive Ltd Belle Rive Ltd has an annual turnover of Rs 60 million of which 80% is on cr

Create a report that fully explains both directors views, The Directors of ...

The Directors of Rohan Plc are discussing the importance of the dividend policy on the market value of their firm. The Chairman considers that the dividend is important and does a

Explain takeovers obligation, Takeover, Inc. is a Delaware corporation whos...

Takeover, Inc. is a Delaware corporation whose only stated purpose is to acquire companies.  It has virtually no assets and no employees other than the original founders who contri

What is the bonds value, Third Inc. wishes to issue a perpetual callable bo...

Third Inc. wishes to issue a perpetual callable bond. The current interest rate is 6%. Next year, there is a 30% chance that the interest rate will be 4.5% and a 70% chance that th

Sustainable growth rate, You are given the following information for Clapto...

You are given the following information for Clapton Guitars, Inc. Profit margin 6.3% Total Asset turnover 1.6 Total debt ratio 0.44 Payout ratio 35% Calculat

Write Your Message!

Captcha
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