Time Value of Money and Role of Its Techniques in Finance

Abstract

Investment decisions pertain to the determination of the total amount of assets to be held in the firm. It is the most important decision since funds involve cost and are available in a limited quantity. Its proper utilization is necessary to achieve the goal of wealth maximization.

Time value of money is the common description for the general rule that cash in hand today is worth more than the same amount of cash in the future. The concept of the time value of money is used for an investment decision.