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Unformatted text preview: 1. 1. Identify accounting topics where the time value of money is relevant. Identify accounting topics where the time value of money is relevant. 2. 2. Distinguish between simple and compound interest. Distinguish between simple and compound interest. 3. 3. Use appropriate compound interest tables. Use appropriate compound interest tables. 4. 4. Identify variables fundamental to solving interest problems. Identify variables fundamental to solving interest problems. 5. 5. Solve future and present value of 1 problems. Solve future and present value of 1 problems. 6. 6. Solve future value of ordinary and annuity due problems. Solve future value of ordinary and annuity due problems. 7. 7. Solve present value of ordinary and annuity due problems. Solve present value of ordinary and annuity due problems. 8. 8. Solve present value problems related to deferred annuities and bonds. Solve present value problems related to deferred annuities and bonds. 9. 9. Apply expected cash flows to present value measurement. Apply expected cash flows to present value measurement. Chapter 6  Chapter 6  ACCOUNTING AND THE ACCOUNTING AND THE TIME VALUE OF MONEY TIME VALUE OF MONEY Chapter 6  Chapter 6  ACCOUNTING AND THE ACCOUNTING AND THE TIME VALUE OF MONEY TIME VALUE OF MONEY Future value Future value of a single of a single sum sum Present value Present value of a single of a single sum sum Solving for Solving for other other unknowns unknowns Basic Time Basic Time Value Value Concepts Concepts SingleSum SingleSum Problems Problems Annuities Annuities More More Complex Complex Situations Situations Present Value Present Value Measurement Measurement Applications Applications The nature of The nature of interest interest Simple interest Simple interest Compound Compound interest interest Fundamental Fundamental variables variables Future value Future value of ordinary of ordinary annuity annuity Future value Future value of annuity due of annuity due Examples of Examples of FV of annuity FV of annuity Present value Present value of ordinary of ordinary annuity annuity Present value Present value of annuity due of annuity due Examples of Examples of PV of annuity PV of annuity Deferred Deferred annuities annuities Valuation of Valuation of longterm longterm bonds bonds Effective Effective interest interest method of method of bond discount/ bond discount/ premium premium amortization amortization Choosing an Choosing an appropriate appropriate interest rate interest rate Expected cash Expected cash flow illustration flow illustration Accounting and the Time Value of Money Accounting and the Time Value of Money Accounting and the Time Value of Money Accounting and the Time Value of Money In accounting (and finance), the phrase time value of money indicates a relationship between time and moneythat a dollar received today is worth more than a dollar promised at some time in...
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This note was uploaded on 11/29/2011 for the course ACC 375 taught by Professor Lash during the Spring '11 term at Rutgers.
 Spring '11
 Lash
 Accounting

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