Return is described as the motivating force and the principal reward in the investment process. It is a key method used by investors to compare alternative investments. Returns can be perceived differently by investors. A typical investment’s return consists of two main components: The term “yield” is often used in Read more
The concept of the Time Value of Money recognizes that a sum of money today is worth more than the same sum in the future due to its potential earning capacity. This is fundamentally linked to the idea of interest and the process of compounding or discounting. Within this framework, Read more
The Future Value (FV) is a core dimension of the Time Value of Money. It is defined as the value at some future time of a present amount of money, or a series of payments, evaluated at a given interest rate. The concept of Future Value is closely associated with Read more
The Present Value is a core dimension of the Time Value of Money. It is defined as the current value (the value at time “O”) of a future amount of money or a series of future cash flows, evaluated at a given interest rate. The fundamental principle is that money Read more
The Time Preference for Money, also referred to as the Time Value of Money, is a fundamental concept in Financial Management. It explains that a unit of money received today is worth more than a unit of money received in the future. This phenomenon arises because money received now and Read more