For Your Success
This module has three primary topics: the valuation of a series of cash flows, return on investment, and the construction of an amortization schedule. Knowing how to use financial tools, understanding the premise of present and future value, and being able to analyze loan terms are important concepts for managers, leaders, and general daily decision-making. In this module, we will examine and evaluate formulas and variables to examine financing options and consider how changes in loan and payment terms can impact organizational effectiveness and your own personal financial management success.
TVM
The Time Value of Money is a fundamental concept used in financial analysis. Explain why it is important for financial managers to understand and utilize the principles involved.
Provide an example that could be used to illustrate the concept to people who have not encountered the idea before.
Explain whether you consider it important for people generally to understand the concept as Saudi Arabia continues to move toward Saudi Vision 2030.
Search the SEU library or the Internet for an academic or industry-related article. Select an article that relates to these concepts and explain how it relates to doing business in Saudi Arabia.
Directions:
Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.
Your initial post should address all components of the question with a 600 word limit.
Learning Outcomes
Describe the meaning of an ordinary and an annuity due.
Calculate the present value and future value annuities.
Calculate amortized loan scenarios.
Calculate the present value of growing perpetuity.
Acquire the skills necessary to use a financial calculator, mathematical formulas, and Excel spreadsheets.
Readings
Required:
Chapter 5: The Time Value of Money in Foundations of Finance
Segal, T. (2023). Common methods of measurement for investment risk management. Investopedia.
Recommended:
Chapter 5 PowerPoint Slides
Fernando, J. (2023). Time value of money (TVM). Investopedia.