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Time Value Of Money Examples

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What is the time value of money? Why should accountants have an understanding of present and future value concepts? How can these concepts be applied to business decisions? Provide examples of how these concepts can be used in business and personal finances please!

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The time value of money is a simple concept that compares cash flows at different points in time. Typically you are comparing cash flow today vs cash flow in the future. There are a couple other key concepts to consider when discussing the time value of money; interest and opportunity cost. Both of these concepts are variables that must be considered when performing time value of money ...

Solution Summary

Brief opinion and explanation of the time value of money and how businesses use the concept. 262 words.