Initial Critical Assessment
Valuation of resources is a key consideration for financial managers. Specifically, when making investment decisions, managers/investors must determine cost and benefits over periods of time to make appropriate decisions for limited resources.
Choose one of the following topics to present to your peers in a professional analysis using a minimum of 350 words.
Topics (Choose one)
1. Using section 3.2 of our text (Interest Rates and the Time Value of Money) as a beginning, provide a detailed summary and analysis related to the use of TVM and prepare an example for how you might use TVM in a financial calculation.
2. Net Present Value (NPV) uses valuations of present values of a stream of income to discount to today’s dollars to compare to our investment today. Provide an analysis of the use of NPV within a corporation and prepare an example (with calculations) for how an organization would use NPV in a project decision.
3. Considering the time value of money (TVM) should winners of a lottery take the lump sum payment or the annuity?
4. Within professional sports contracts, contracts are often created to function similar to a bond where players will receive defined cash flows over time. Consider an NFL player (real or fabricated) and explain their contract in terms of TVM and provide an example to explain how these cash flows must be discounted to today’s dollars.