The Time Value of Money and Investment Decisions for Non-financial Professionals
The notion of Time Value of Money is at the foundation of many financial decisions and activities in an organization. Regardless of your functional or departmental role, you may be required to choose between investment options in assets, plants and equipments, new businesses, advertising campaigns, employee training, or technology, based on their future cash flow expectations. It is important for you to make sound financial decisions to allocate your organization's resources most effectively and ensure the best return possible on them. This course attempts to familiarize you with the concept of Time Value of Money and presents some effective methods to evaluate the desirability of decisions involving capital expenditures and investment. This course covers two of these methods – Payback Period and Net Present Value—in greater detail to help you choose between different investment options.
What You Will Learn
- Calculating the present and the future value of a single amount in given scenarios
- Recognizing the key characteristics of three methods for capital budgeting
- Calculating the Payback Period of different investment options
- Determining the best investment among different options using the Net Present Value method