Time Value of Money – What is it Really?
7 Pages Posted: 2 Jun 2010
Date Written: June 2, 2010
Abstract
The 20th and 21st centuries have witnessed the use of age old golden business mantra ‘use money always quickly and as much as possible to make money.’ Thus financial management has assumed even greater role and importance than the very output of the forms. Very many firms have gone to the oblivion even with good useful products and services due to inefficient or faulty financial management, Lehman Brothers case being the latest one. The first and foremost tool of financial management seems to be the fundamental concept of ‘time value of money,’ critical for financial and investment decisions. This paper attempts to revisit this basic concept and finds interesting conclusions.
Keywords: Time Value of Money, Discounting, Present Value, Finance, Financial Management, Opportunity Cost
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