Financial Analysis in Risk Management Decision Making • The time value of money must be considered when decisions involve cash flows over time - Considers the interest-earning capacity of money - A present value is converted to a future value through compounding - A future value is converted to a present value through discounting
Financial Analysis in Risk Management Decision Making • The time value of money must be considered when decisions involve cash flows over time - Considers the interest-earning capacity of money - A present value is converted to a future value through compounding - A future value is converted to a present value through discounting
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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