« previous next »

Author Question: Discuss the nature and importance of the TVM equation. What will be an ideal ... (Read 69 times)

karen

  • Hero Member
  • *****
  • Posts: 537
on: Jul 10, 2018
Discuss the nature and importance of the TVM equation.
 
  What will be an ideal response?

Question 2

A way of managing a firm's cash disbursements would be through
 
  A) accounts receivable factoring. B) zero balance accounts.
  C) lockbox system. D) floating lien.


LP

  • Sr. Member
  • ****
  • Posts: 302
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: The TVM equation makes the fundamental point that money flows over time cannot simply be added or subtracted. That is why money flows need to be discounted or compounded to one point in time, whether the flows are lump sums or annuities. Discounting or compounding can be done mathematically or with a TVM table, financial calculator, or spreadsheet. The TVM equation is important because it is used in almost every financial applicationfor example, loans, the pricing of financial and real assets, assessing firm projects, savings plans, and retirement plans.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

Glaucoma is a leading cause of blindness. As of yet, there is no cure. Everyone is at risk, and there may be no warning signs. It is six to eight times more common in African Americans than in whites. The best and most effective way to detect glaucoma is to receive a dilated eye examination.

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Did you know?

In 2012, nearly 24 milliion Americans, aged 12 and older, had abused an illicit drug, according to the National Institute on Drug Abuse (NIDA).

Did you know?

The FDA recognizes 118 routes of administration.

Comparing allele and genotype frequencies in a population with the Hardy-Weinberg equation and a Pun Comparing allele and genotype frequencies in a population with the Hardy-Weinberg equation and a Pun
Nature Nature
How to determine an equation in vertex form of a parabola How to determine an equation in vertex form of a parabola
How to find the equation of a line that is perpendicular to a line passing through a point How to find the equation of a line that is perpendicular to a line passing through a point
How to determine if a quadratic equation has a maximum or minimum when given the roots How to determine if a quadratic equation has a maximum or minimum when given the roots
Solving a root equation Solving a root equation
Video: Carbohydrate Metabolism: Introduction to renal processes and filtrate formation and composition

For a complete list of videos, visit our video library