Economics May 11, 2011 Economics Time Value of Money Time Value of Money (TVM) is a significant concept in financial management. It can be used to link investment alternatives and to solve problems involving loans, mortgages, leases, savings, and allowances…
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For instance, you can invest your dollar for one year at a 6% annual interest rate and accumulate $1.06 at the end of the year. You can say that the future value of the dollar is $1.06 given a 6% interest rate and a one-year period. It follows that the present value of the $1.06 you expect to receive in one year is only $1. A key concept of TVM is that a single sum of money or a series of equal, evenly-spaced payments or receipts guaranteed in the future can be converted to an equivalent value today. Conversely, you can determine the value to which a single sum or a series of future payments will grow to at some future date. You can calculate the fifth value if you are given any four of: Interest Rate, Number of Periods, Payments, Present Value, and Future Value. FTEs FTEs are basically the full time equivalents and help in analyzing the work done in hours according to the number of laborers employed. Efficiency indicators for benchmarking frequently require a benchmarking health unit to provide the number of FTEs involved in a particular activity. This is not a problem where programs are specialized, i.e. where full and part time staff is assigned to specific activities. ...
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The act of putting off the application of a unit of money implies they are postponing on consumption. To convince people to postpone their consumption and invest or lend their money, they demand a return over time for their money. This return comes in the form of capital or interest gain. This therefore means that, assuming annual returns are reinvested, an amount of money invested now grows to a greater amount in the future .Conversely, a specific amount of money that is to be paid out or received in the future is worth less in the present. This happens due to this fact; that the lower the amount today could get invested or in another alternative lent out as well as would grow to a bi
The comparison and decision becomes possible if those cash flows or future streams are converted to its present values applying appropriate discounting factor for that time periods. (Biger, N. 2008) While applying this concept, it is required to take into consideration the risk associated with the return.
This movement grew and turned into a rebellion causing great loss of life and violation of basic human rights. United Nations and the international community openly criticized the actions of Mummar Gadaffi and the way he handled the situation. Later USA and EU decided to intervene using the airspace of Syria.
However, Time Value of Money analysis needs to be conducted in order to find out what payment should be made for the bond now in order to get back $ 1000000 after one year. However, there are significant other factors that need to be considered while conjuring up to the present value of the bond.
To demystify the whole situation, there is a need to explain to children about death (Berk 5). In fact, this is not an easy task as it may sound. Most people will not have an appropriate method of explaining the occurrence and could damage the development of the child.
lies they are postponing on consumption. To convince people to postpone their consumption and invest or lend their money, they demand a return over time for their money. This return comes in the form of capital or interest gain. This therefore means that, assuming annual
different time frames; looking at absolute values, it becomes almost impossible to arrive at conclusion, which one is more beneficial in terms of financial return to us. The comparison and decision becomes possible if those cash flows or future streams are converted to its
rts.1 The mercantilist doctrine arose in Europe after the decline of feudalism.2 During this period, the economic interest of the country could be strengthened by governmental protection of the home industries. It was possible to achieve this protection through increasing
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