week 6 – The Time value of money

The time value of money is an important topic in finance. It essentially postulates that $1 today is worth more than $1 received tomorrow. Let’s complete a few problems dealing with this concept:

1. How do you think today’s low interest rate environment is impacting the time value of money? How might this change the value of an asset or liability?

2. What is the relationship between the concepts of net present value and shareholder wealth maximization?