Financial Investment Research Paper example
Masters
Research Paper
Finance & Accounting
Pages 5 (1255 words)
Download 0
Overview Although time value of money is not something that we normally think about, it is a concept that is used in our everyday lives, from banking and business, to investing and saving. The concept of interest lies at the root of the time value of money…

Introduction

The principles of time value of money and learning its techniques are the most important concepts for the study and application of finance in general. The concept of interest is divided between simple and compound interest. Simple interest is calculated only by taking into consideration the beginning principal. For instance, if an individual invested $1,000 dollars in a savings account at 5% annual interest, the expected return after one year would amount to a $50 gain on investment. The concept of compound interest unlike simple interest which only takes into consideration the interest return of the initial principal investment is determined by taking into consideration not only total interest on the principal, but it also includes any interest gained on the initial investment. In simple terms, compound interest calculations encompass interest on interest. It is of paramount importance for a finance manager to understand and have a through understanding of time value of money concepts and its impact on the value of an asset at a specific point of time in order to be successful. Present and Future Value of an Investment For a company one of the most important tools in determination in the time value of money analysis for a specific asset is the cash flows time line. ...
Download paper
Not exactly what you need?

Related papers

Principles of Financial Investment
The effects of these agency problems create agency costs that work against the benefit of all stakeholders as well as for the company. This write up identifies those agency problems, its agency costs, and enumerate the ways to mitigate the agency costs in order to provide maximization of wealth of stakeholders as well as for the benefit of management and the company itself. Definition of agency…
Financial and Investment Opportunity
When assessing investment suitability, most advisers and investment managers take into consideration customer’s attitude to risk, but they fail to account appropriately for their capacity for loss. Therefore, this calls for financial consultants to assess the clients’ attitude towards risks during the evaluation of investments process using the most suitable tools. …
Analyis of financial objectives. financials projecttions and investment decisions
Being employed in the finance department at Aztec Catering, this report analyses the tasks that Ms. Field, the Chief Financial Officer at Aztec Catering, has given and this report is aimed to review the three current objectives of the company, prepare and analyse the three year financial plan of Aztec Catering as well as evaluate the capital investment decision that the company can take and how…
Analyis of financial objectives, financials projecttions and investment decisions
These objectives are designed and reviewed at fixed intervals, discrepancies are identified and finally based on reviews suggestions are employed to meet the desired gaps. In same trend management of the company in the year end 2012 called up board meeting and planned company objectives for the next three years. This report is based on the review of the planned objectives. For the purpose, this…
Corporate investment: Financial Market Imperfection
In the middle of perfect capital market, the decision on a company’s investment ought not to be altered by the firm’s financing positions. The imperfection on capital market nevertheless, brings in a barrier the costs of external cash flow and the internal funds. Companies that are facing greater levels of imperfection in information exhibits wider barriers hence they possess more sensitive…
Financial Investment Analysis
This, particularly, must be challenging for companies with global operations that may have their cash balances fragmented across different geographies, banks, and bank accounts which make accessing cash difficult (Huang 2003). In this regard, this paper seeks to address the issue of efficient diversification as a comprehensive strategy in liquidity and stock return. Liquidity of an asset explains…
Financial Investment
Ratio analysis and share price analyses are 2 most important and commonly used tools to analyze the financial position of a particular stock. A proper fundamental and technical analysis generally provides a basic idea regarding these aspects and helps investors make informed investment decisions. Generally the intrinsic value of the stock is determined from the financial facts given the annual…