Chapter 3 - Time Value of Money 1$ today is worth more than 1$ in the future 3 main reasons o risk you may not receive that 1$ in the future o inflation

Chapter 3 - Time Value of Money 1$ today is worth more than...

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Time Value of Money 1$ today is worth more than 1$ in the future 3 main reasons: o risk you may not receive that 1$ in the future o inflation an increase in the general price level o opportunity cost you can use the 1 dollar today Types of Time Value Problems future value (lump sum) present value (lump sum) annuities & loan payments o constant streams of cash flows future value of annuities
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