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    Present Value, Future Value, & Opportunity Cost

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    "The study level of Other is Masters."

    What practical value can be gained from the following: present value, future value, opportunity cost?

    © BrainMass Inc. brainmass.com March 4, 2021, 6:43 pm ad1c9bdddf

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    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 a given amount of money now, rather than the same amount at some future time. Three reasons may be attributed to the individual's time preference for money:
    1. Risk
    2. Preference for consumption
    3. Investment opportunities

    Two most common methods of adjusting cash flows for time value of money:
    Compounding-the process of calculating future values of cash flows ...

    Solution Summary

    This discusses the concept of Present Value, Future Value, & Opportunity Cost