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Time value of money...? Question Introduction In economics and finance, **money** is said to have a **time** **value**. This in essence meansthat a unit of **money** e.g. a dollar that people currently possess is preferred over a unit that they expect to receive in the future. The act of putting off the application of a unit of **money** implies they are postponing on consumption. To convince people to postpone their consumption and invest or lend their **money**, they demand a return over **time** for their **money**. This return comes in the form of capital or interest gain. This therefore means that, assuming annual returns are reinvested, an amount of...

5 Pages(1250 words)Research Paper

Time value of money...? **Time** **Value** of **Money** Introduction **Time** **value** concept is an important concept in a financial world. It gives us clarity about as to how we should go ahead comparing two different investment avenues in terms of present **value**. It will not be possible to compare straight two securities giving different returns in two different **time** frames; looking at absolute **values**, it becomes almost impossible to arrive at conclusion, which one is more beneficial in terms of financial return to us. The comparison and decision becomes possible if those cash flows or future streams are converted to its present **values** applying appropriate discounting factor for that **time** periods. (Biger, N. 2008) While applying this concept, it is required to take... after...

3 Pages(750 words)Research Paper

Time Value of Money...?Introduction The objective of this paper is to get an understanding of the concept of the **time** **value** of **money**. We first study the two important concepts in the area: Present **value** and the Future **Value** and its importance to the subject of corporate finance. We then look at some questions which calculate the present **value** of the future cash flows and the future **value** of present cash investments. 1. The concept of **time** **value** of **money** is critical to the world of Finance and is very often the first subject that is taught in a Corporate Finance class. It is based on the simple premise that “A penny in hand today is worth more than a penny in hand tomorrow”. This is on the basis of assumption that the **money** in hand today can be invested... in...

4 Pages(1000 words)Essay

Time Value of MOney...?**Time** **Value** of **Money** The situation that a client of the company is facing is whether to buy a fixed income security i.e. bond, which will pay $ 1000000 a year from today. The detailed features of the bond, whether it is a coupon paying bond or a zero coupon bond is not known. However, **Time** **Value** of **Money** analysis needs to be conducted in order to find out what payment should be made for the bond now in order to get back $ 1000000 after one year. However, there are significant other factors that need to be considered while conjuring up to the present **value** of the bond. Before calculating the discount rate and...

3 Pages(750 words)Research Paper

The Time Value of Money...The **Time** **Value** of **Money** What is **Time** **Value** of **Money** To understand **time** **value** of **money**, suppose that you are offered two options. You can take $ 10000 today or $10000 five years from now. Which one should you choose Many of us would accept the first option since it will provide us with the $ 10000 today and we humans, being impatient would not want to wait for 3 years for this $ 10000.
Although, our decision is correct in financial terms, what we fail to understand is that the $ 10000 received today will not be equal to $ 10000 received five years from now because the $ 10000 today can...

4 Pages(1000 words)Essay

Time Value of Money...**Time** **Value** of **Money** Annuities are a series of equal payments that are made in return of a future lump sum amount. A fine example of an annuity wouldbe of a mortgage loan that is usually taken in order to pay off a loan for some property. These are equal payments whose sum equals the **value** of the future **value** of the payment. **Time** **value** of **money** concept forms the basis of this annuity concept (Gordon, 1999). To understand the concept better, one must understand the concept of opportunity costs. Opportunity costs are the benefit that a person sacrifices by using **money** in a particular way....

3 Pages(750 words)Essay

Time Value of Money Calculations...**Time** **Value** of **Money** Introduction The creation of added **value** is the main objective of investing in projects. Updating the server population may benefit the IT department and by extension the organization in some way. However, the cost of doing so may outweigh this benefit and so may not create added **value** for the company. It therefore means that the project must be evaluated to determine its profitability. In order to determine whether or not a project is beneficial or whether one project is more beneficial than another a number of project evaluation techniques are available for use in making decisions.
Project Evaluation Techniques
Capital budgeting decisions are based on an evaluation of the cash flows expected from investing... the annual...

3 Pages(750 words)Assignment

Time value of money...**TIME** **VALUE** OF **MONEY** **Time** **value** of **money** is a term that measures the increase or decrease in the **value** of **money** with respect to **time**. The buying powerassociated with certain amount of **money**; do change as the **time** passes and multiple factors such as inflation, exchange rates, interest rate and other fluctuations economic conditions come into play. Two factors are central in this concept; present **value** and future **value** of **money** (Homer and Leibowitz, 269-276).
One of the important financial decisions that...

1 Pages(250 words)Essay

Time Value of Money...**Time** **Value** of **Money** al Affiliation: Question **Time** **value** of **money** is the consideration of the change in **value** of a given amount of **money** over a given period of **time**. This is because there are certain factors within the economy that create a state where a given sum of **money**, say $1,000, cannot purchase the same amount of items presently, as it could 5 or 10 years ago. This concept is used to analyse investment in terms of the **value** added to the initial investment over a given period of **time**.
Question 2
An ordinary annuity is a sequence or...

3 Pages(750 words)Coursework

Time Value of Money _...**Time** **Value** of **Money** Affiliation “Take heed if your are buying or selling annuities”, is an article that provides an imformatic look at the ever changing regulatory landscape, and its relation to annuity products. It also elaborates on the responsibilities a fiduciary has when it comes to selling these products to a client. The article discusses the criteria, legal factors and issues an attorney has to consider as a trust fiduciary on annuity investments in the US.
Various federal and state rules have been trying to narrow down the sale of equity indexed annuities to suitable investors. It is important that lawyers should note the key issues in annuity sale and investment. The relationship between a trustee and the beneficiaries... that the...

3 Pages(750 words)Essay