This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Disciplines
Why This Chapter Matters To You
Accounting: You need to understand
time-value-of-money calculations in order
to account for certain transactions such
as loan amortization, lease payments, and
bond interest rates.
Information systems: You need to understand time-value-of-money calculations in
order to design systems that optimize the
firm’s cash flows.
Management: You need to understand
time-value-of-money calculations so that
you can plan cash collections and disbursements in a way that will enable the
firm to get the greatest value from its
Marketing: You need to understand time
value of money because funding for new
programs and products must be justified
financially using time-value-of-money
Operations: You need to understand time
value of money because investments in
new equipment, in inventory, and in production quantities will be affected by timevalue-of-money techniques. CHAPTER 4 Time Value of Money 131 ecause we view the firm as a going concern, we assess the decisions of its
financial managers, and ultimately the value of the firm itself, in light of its
cash flows. The opportun...
View Full Document