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Unformatted text preview: se to assess the impact of proposed actions. Because firms have long lives and their
important decisions affect their long-term cash flows, the effective application of timevalue-of-money techniques is extremely important. Time value techniques enable financial
managers to evaluate cash flows occurring at different times in order to combine, compare,
and evaluate them and link them to the firm’s overall goal of share price maximization. It
will become clear in Chapters 6 and 7 that the application of time value techniques is a key
part of the value determination process. Using them, we can measure the firm’s value and
evaluate the impact that various events and decisions might have on it. Clearly, an understanding of time-value-of-money techniques and an ability to apply them are needed in
order to make intelligent value-creating decisions. REVIEW OF LEARNING GOALS
Discuss the role of time value in finance, the use
of computational tools, and the basic patterns
of cash flow. Financial m...
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