Essentials of Corporate Finance
Essentials of Corporate Finance
8th Edition
ISBN: 9780078034756
Author: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4, Problem 1CTCR
Summary Introduction

To discuss: The meaning of compounding and discounting.

Introduction:

The time value of money implies that the cash in hand at present has a higher value than the cash receipt promised in the future. Hence, simple interest or compound interest on the investment helps in reducing the effect of time value of money.

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