In this week's discussion,prepare a synopsis of the material discussed in the chapter readings.In your post,share any questions you may have regarding the managerial finance concepts presented in the...

TIME VALUE OF MONEY
Synopsis
Time value of money is the difference between the present and the future value of money. It is also called the present value of future cash flows. Here cash flows mean cash outflows. This means the amount invested today is worth more than the future returns.
In short, the present amount is the present value and the future amount is the future cash flows and the exact rates that merge the two amounts are called the discount rate.
Present Value = Future Value/ (1 + Discount Rate)
Future Rate = Present Value X (1 + Discount Rate)
The power point shows how to calculate the WACC or Weighted Average Cost of Capital. It also shows how to find the intrinsic value of a share.
The WACC is equal E/MV* Ke + D/MV*Kd(1-t)
Where, E = Market value of Equity share, MV = Market value of the firm, Ke = Cost of equity share, D = Market value of the Debt, Kd = Cost of Debt and (1-t) = Tax Rate.
Through WACC we can determine the cost that is required to be paid by the company during a...