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

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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please explain to me this screenshot of power point presentation and give me some example if ever you have any idea. thank you.

12:20
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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
Q Slide a Picture
T Text Box
88
Transcribed Image Text:12:20 (18) Done 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 Q Slide a Picture T Text Box 88
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