Purchase Solution

Time value of money and capital budgeting

Not what you're looking for?

Ask Custom Question

How do time value of money concepts assist a company in making capital budgeting decisions?

Purchase this Solution
Solution Summary

This explains the time value of money concepts assist a company in making capital budgeting decision

Solution Preview

Time literally is money - the value of the money you have now is not the same as it will be in the future and vice versa. It impacts business finance, consumer finance and government finance. Time value of money results from the concept of interest.
THere is a time preference for money is an individual's preference for possession of ...

Purchase this Solution
Free BrainMass Quizzes
Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

View More Free Quizzes
Related BrainMass Solutions

  • Why is the time value of money so important in capital budgeting decisions?

    160523 Time Value of Money Why is the time value of money so important in capital budgeting decisions? Why is the time value of money so important in capital budgeting decisions?

  • Capital Budgeting and TVM in IT Management

    Discuss capital budgeting and time value of money (TVM). can you explain why time value of money is important to capital budgeting.

  • Payback Period, Sensitivity Analysis

    Time value of money is an extremely important concept in capital budgeting and by ignoring it, the payback period method does not provide accurate results. The best decision making criteria in capital budgeting is NPV Analysis.

  • Accounting 5

    b. capital budgets don't affect cash flow. c. it considers the time value of money. d. depreciation calculations are required. Capital budgeting uses the time value of money to evaluate future cash flows of particular projects.

  • Discount Flow Techniques and Value of Money

    Its implication on time value of money and capital budgeting The investment decisions of a firm are generally known as the capital budgeting, or capital expenditure decisions.

  • Importance of the Time Value of Money Concept

    111851 Importance of the Time Value of Money Concept Why is the time value of money concept important in accounting? Under what circumstances would we use the time value of money calculations?

  • Capital Budgeting Techniques - NP, PI, IRR and Payback

    It considers the risk of the future cash flows, considers all cash flows, and uses the time value of money.

  • Auditing

    Does the net present value method provide a measure of the rate of return on capital investments? How do capital investments affect profitability? What is a postaudit? How is it useful in capital budgeting? Time Value of Money 1.

  • Time Value of Money relative to capital budgeting process

    401990 Time value of money (TVM) is a very important concept. Why is it important for those participating in the capital budgeting process? Time value of money (TVM) is a very important concept.

View More Related Solutions