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Finance Two Questions-




Finance Two Questions-;What is The Purpose of Learning the Time Value of Money?;Answer: The time value of money is so important to capital budgeting. A business chooses to invest money in projects as an expansion, a strategic acquisition or purchase of equipment.Business may produce a positive cash flow from the project ?????.... As money today is worth more than the same amount of money in any future point of time, loans, investments, and any other capital budgeting projects must be compared at a single point in time to determine whether one is good/profitable or another???.;What are the Factors that Affect the Components of Interest Rates?;Answer: Interest rate reflects the amount received in relation to an amount invested, the time for which the money is on loan or investment, the risk associated the investment that the money may not be ??..;Real Risk-Free Rate: If no risk/?...;Expected Inflation: As the market expects the aggregate prices to rise and the purchasing power of money is reduced ??...;??. and cannot be easily exchanged for cash. In this case may be a certain loss is expected if securities are traded infrequently or less liquidly. A less liquid security must compensate the holder by offering a higher interest rate for this loss.;THE FULL ANSWER is in the SOLUTION


Paper#77963 | Written in 18-Jul-2015

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