Question

How can a corporation best take advantage of the concept of the time value of money?

Answer #1

Answer: Time value of money: Time value of money is based on assumption that present worth of a dollar is more than the future worth of the one dollar due to its earning capacity.

A corporation can take best advantage of above concept in their business. Every corporation have limited amount of fund, so they invest in such project whose will be provide better return from other projects. If corporation invest the fund in a project, corporation should know the estimated future return from the project. Corporation should compare the project return with cost of capital and required return. If project return is more than cost of capital or required return, project should be accepted other wise it will be rejected.

Therefore, corporation use the concept of time value of money to grading the projects or accepting the projects.

How can a corporation best take advantage of the concept of the
time value of money?

How can a corporation best take advantage of the concept of the
time value of money?
Contain at least one reference.

"Time Value of Money "
The time value of money is a critical concept to understand in
accounting, especially when dealing with loans, investment
analysis, and capital budgeting decisions. The time value of money
concept can be used to decide which projects to start and what
investments to make. You can also utilize the time value of money
concept in your personal life.
Provide two (2) decisions you may need to make
that could involve the time value of money....

how can the "time value of money" concept affect the valuation
of liabilities?
For example, how can this concept be used to determine the price
of bond?
In contrast, how can it be used to help us plan for a specific
goal (e.g., purchase of a car, home, or retirement)?

Time Value Money Ice Breaker Discussion Please take a moment to
click on "Time Value money" topic and and share your understanding
to that concept with the class. What was the most important
concepts you learned from reviewing the material of that week? How
can you use the topic in better understanding your work or future
career? What questions are uppermost in your mind as we conclude
the session of this week (questions must be related to the material
presented...

Explain the concept of the time value of money and how it is
related to the opportunity costs of a college education, both while
attending college and after graduation.

Explain the concept of time value of money, including
compounding and discounting. Consider how time value of money
applies to your personal life by addressing the following:
Describe at least one specific personal situation in the past
where the use of time value of money concepts would have helped you
make a better decision. Explain how time value of money applies to
this situation.
Describe at least one specific personal situation that you
expect to encounter in the future where...

What is the concept of time value of money?

Explain the concept of time value of money in the context of
simple interest. How would you use this in retirement planning

Explain the time value of money concept. What is meant by
the effective interest rate. How are time value of money concepts
applied to accounting applications in determining the present value
of expected cash flows and in valuing bonds?

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