Explain the concepts of present value and future value

What will be an ideal response?


These concepts relate to the time value of money. Because interest rates are positive, a given amount of money in the future is not worth as much today. If you want to know how much a future amount of money is worth, you take the present value. This is the amount that you could borrow against the future amount while using the future amount to pay the interest plus principal on the loan. Analogously, the future value of an amount of money available today is the value that would be available in the future if you invested today and received the principal plus interest on the investment in the future.

Business

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The process of thoroughly gathering, prioritizing, and documenting an organization’s HR information requirements is a ______.

a. needs analysis b. business case requirement c. planning analysis d. workflow chart

Business

Jordan Inc has the following balance sheet and income statement data: Cash$14,000  Accounts payable$42,000 Receivables70,000  Other current liabilities28,000 Inventories280,000  Total CL$70,000 Total CA$364,000  Long-term debt140,000 Net fixed assets126,000  Common equity280,000 Total assets$490,000  Total liab. and equity$490,000 Sales$280,000    Net income21,000    ? The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.15, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change? Do

not round your intermediate calculations. A. 29.38% B. 19.50% C. 29.86% D. 25.04% E. 24.08%

Business

How do you convert weak entities to relations?

What will be an ideal response?

Business

Which of the following is the most uncommon reason why companies outsource?

A. Tap outside sources of expertise. B. Concentrate resources on core business. C. Reduce headcount and related expenses. D. Better manage the costs of internal processes.

Business