Why is the concept of time value of money important in the corporate context? Justify your answer. A complete post includes an explanation supported by examples and a minimum of 2 research sources. Your post must be substantive and demonstrate insight gained from the course material. A substantial post accomplishes one or more of the following:
The time value of money (TVM) is a critical concept in the corporate world because a dollar on hand today is considered significantly bigger than the same amount promised in the future. At the basic level, this notion depicts that, provided everything remains constant, it is better to have money now rather than later. TVM is critical because before making an upfront investment, businesses need to know whether the future cash flows will match the current asset bought.