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THE TIME VALUE OF MONEY - Coggle Diagram
THE TIME VALUE OF MONEY
FUTURE VALUE
MESURE
ALLOWE THAT IS ALLOWED TO GROW AT A GIVEN RATE
AMUITY
SERIES OF CONSECUTIVE PAYMENTS OR RECEIPTS
PRESENT VALUE OF AMUITY
PROCESS REVERSED
PURCHASE NEW PLANT AND EQUIPMENT
REQUIRES CAPTITAL ALLOCATING OR CAPITAL BUDGETING
PRESENT AND FUTURE VALUE ARE RELATED INVERSELY TO EACH OTHER
FUTURE VALUE OF AMUITY
FIND THE FUTURE VALUE FOR EACH PAYMENT AND THE TOTAL
RELATIONSHIP TO CAPITAL OUTLAY DECISION
DECISION TO PURCHASE NEW PLANT AND EQ
INTRODUCE A NEW PRODUCT
REQUIRES
USING CAPITAL ALLOCATING OR CAPITAL BUDGETING TECHNIQUES
PRESENT VALUE
EXACT OPOSITE OF THE FUTURE VALUE
GRAPHICAL PRESENTATION OF TIME VALUE RELATIONSHIP
SUPPLEMENT THE PREVIOUS DISCUSSION OF FUTURE VALUE
INTEREST FACTOR
FV= PV (1+I)n