Time value of money (TVM) as it applies to single cash flow, is the foundation of mathematical finance. It is important to be able to demonstrate how the TVM concept can be applied to corporate finance, as well as to personal finances. In addition, knowing how to apply various technical terms used in finance, such as discount rate, present value, and future value, is a useful skill.
In a Word document, respond to the following. Number your responses 1–3.
Explain the concept of cash flow in corporate finance.
Explain how present value and future values are related.
Explain how present values are affected by changes in interest rates.