Complete Part I: Time Value of Money worksheet by defining the time value of money. Include a real-world example that illustrates the concept. Answer the questions:
Why is time such an important factor in financial matters?
How might you use the principles of the time value of money to your financial benefit?
Complete Part II by calculating the present value, internal rate of return, and payback period depicted in the worksheet.
Post assignment as an attachment. Chapters included (IF NEEDED)
Associate Level Material Time Value of Money Resource: Ch. 12, 12-A, & 12-C of Health Care Finance Part I: Complete the following table by inserting your responses to the questions. Cite any sources you use. Define the time value of money. Provide a real-world example for the time value of money. Why is time such an important factor in financial matters? How would you use the time value of money to your financial benefit? Part II: Complete the following table by calculating the ratios. Present Value AmountCompounding periodRate of interestPresent value$100,000Annual6% for 10 years$70,000Annual4% for 15 years Internal Rate of Return Initial cost of investmentPeriods of useful lifeEstimated annual net cash inflow generatedLook-up table valueRate of interest$75,00010 $10,190$56,0006 $12,115 Payback Period: Assume there are no income taxes for both scenarios. Purchase price of equipmentPeriod of useful lifeAnnual revenue generated per yearOperating costs associated with revenueDepreciation expense per yearPayback period result$550,00010 years$100,000$32,000$55,000$350,00010 years$80,500$36,000$35,000
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