Week 11 Discussion- Managerial Finance

Week 9 Learning Resources

Managerial Finance

Time Value of Money

If you had $100 today, would it be worth the same as $100 a year from now or more? The answer is that $100 is worth more today because of the concept of time value of money (TVM), which can also be called present discounted value. One year may not seem like much, but consider it this way: Would $5,000 be worth more today or in 1950, when the average yearly income was a few thousand dollars? Money today can be used to invest in a business, and it can be invested to generate interest. Or, it could be tucked under a mattress and slowly have its value deteriorate due to inflation. These are the principles that are relevant when discussing the time value of money and what to do with your or an organization’s cash. Using these resources, you will examine the concept of time value of money.

· Brigham E. F., & Houston, J. F. (2022). Time value of money. In  Fundamentals of financial management (16th ed., pp. 151–185). Cengage Learning.

· The Finance Storyteller. (2018, November 29).  Time value of money explained  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=gkp-7yhfreg

· ProfCoram. (2011, August 16).  Calculating PV (present value) and PMT (payment) time value of money problems using Excel  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=rpUD7nVKjGI

· ProfCoram. (2011, August 16).  Calculating FV (future value) time value of money problems using Excel  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=AuJvHoypfQU

· ProfCoram. (2011, August 16).  Calculating RATE time value of money problems using Excel  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=PUQgILo9C3s

· ProfCoram. (2011, August 16).  Calculating PMT (payments) time value of money problems using Excel  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=HxUYo-nsyyE

· Walden University, LLC. (2021).  Present value of an investment [Video]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2021).  Future value of an investment [Video]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2021).  Future value of an annuity [Video]. Walden University Canvas. https://waldenu.instructure.com

Bond Valuation

While performing a bond valuation, you will aim to determine what the theoretical fair value is for a bond, including making the calculation the present value of its future interest payments, which is also called its cash flow. You will also aim to calculate its value upon maturity, which is also called its face value or par value. Through these resources, you will explore the concept of bond valuation.

· Brigham E. F., & Houston, J. F. (2022). Bonds and their valuation. In  Fundamentals of financial management (16th ed., pp. 231–265). Cengage Learning.

· Brigham E. F., & Houston, J. F. (2022). Interest rates. In  Fundamentals of financial management (16th ed., pp. 196–224). Cengage Learning.

· Marketplace APM. (2011, September 10).  What is a yield curve?  Links to an external site.  [Video]. YouTube. https://www.youtube.com/watch?v=FfZNTsoNjGg

· Investopedia. (n.d.).  Some advantages of bonds  Links to an external site. . http://www.investopedia.com/articles/00/111500.asp

· EasyCalculation.com. (n.d.).  Bond price calculator  Links to an external site. . https://www.easycalculation.com/finance/bond-price-calculator.php

· Kenny, T. (2020, February 11).  Evaluating a bond with yield to call and yield to worst  Links to an external site. . https://www.thebalance.com/the-difference-between-yield-to-call-and-yield-to-worst-417079

· MoneyChimp.com. (n.d.).  Bond yield calculator  Links to an external site. . http://www.moneychimp.com/calculator/bond_yield_calculator.htm

· Walden University, LLC. (2021).  Bond valuation [Video]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2021).  Yield to maturity and yield to call [Video]. Walden University Canvas. https://waldenu.instructure.com