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Fundamentals of Corporate Finance, 4/c/e

Fundamentals of Corporate Finance, 4/e

Stephen A. Ross, Massachusetts Institute of Technology
Randolph W. Westerfield, University of Southern California
Bradford D. Jordan, University of Kentucky
Gordon S. Roberts, York University

Introduction to Valuation: The Time Value of Money

Learning Objectives

After studying this chapter in the textbook, you should be able to:

Inflation aside, explain why the statement, "a dollar today is worth more than a dollar tomorrow" is true.

Define and compute the future value of a payment for one or more time periods.

Explain the difference between simple and compound interest.

Define and compute the present value of a payment for one or more time periods.

Explain why the discount rate and present value are inversely related.

Compute the discount rate given information on present value, future value and the number of time periods.

Compute the number of time periods given information on present value, future value and the discount rate.

2002 McGraw-Hill Higher Education
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