How do you explain the use of time value of money (TVM) in business? What considerations are made when calculating TVM? How may you use TVM to create your own, or someone else’s, retirement plan? Answer The time value of money (TVM) is used in businesses for the purpose of finding out the suitability of an investment and understanding returns in the context of opportunity costs. It helps us to understand the relationship between the usage of money and the value of returns it provides from a particular venture or avenue based on the time it would take for providing the return and the future value of the return.
Which element of the comprehensive financial plan focuses on your housing needs, setting aside money for emergencies, and establishing a career path? Budgeting your money correctly. The economy is unpredictable and can affect your personal financial planning. List one factor in economic conditions
What is the relationship between an operating and a cash budget? Why is it important for an organization to prepare a cash budget? According to "Cliffnotes.com" (2012), “The cash budget is prepared after the operating budgets (sales, manufacturing expenses or merchandise purchases, selling expenses, and general and administrative expenses) and the capital expenditures budget are prepared. The cash budget starts with the beginning cash balance to which is added the cash inflows to get cash available. Cash outflows for the period are then subtracted
In order to do this the company has to have a capital structure that is sufficient enough to be able to increase its cash flow, pay its debts, and have a return on its investments. This method has to also offer an option that will minimize the company's overall cost while providing addition dividends to investors at the least possible risk. To determine this we will use Earnings per share from the table
Therefore, Ratio Analysis should only be used as a first step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas which need to be investigated further Profitability. The net profit percentage shows the amount of money the business earns before the tax and the bills have been paid. This is useful because the company knows the amount of money they have before paying taxes and bills. To calculate this responsible has to calculate the net profit dived by the turnover and then times it by 100. FORMULA: (net profit/ turnover) x 100.
In order to help the economy’s growth in the future Government spending can be used if used for extra capital spending. This leads to an increase in the stock of national assets. For instance, an increase in the transport infrastructure will improve the supply-side capacity of the economy which will promote growth. This is estimated through the cost-benefit analysis. Another, way to establish growth in the future would be to use budget deficit as a tool or demand management.
Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. Create a budget and save and invest money .Saving money is important to me because when I don’t have the money to do what I need to do that is a need I can always go to my savings account and pull out what is needed . Budgeting is collecting don’t spend unnecessary money. 2. List two examples of goods you have purchased in the past or may purchase in the future.
1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points) Two examples of what financial planning can do for is save and invest money and make choices about how to spend money responsibly. I’m getting to the stage in my life where I’m graduating, becoming an adult, and starting to learn how to do things more on my own.
Companies will know where they can maximize these profits. Also consumers spending can be predicted off what provides the greatest utility or satisfaction. Because of the laws of supply and demand, it is better understood when to produce or offer goods and services and when it is better to produce
Wise stock investing can be a tricky way to save for retirement because of the way stocks rise and fall. People that are not very knowledgeable about stocks can rely on experienced companies, like T. Rowe Price, to help guide them in a proper direction. Another strategy is taking full advantage of the 401k program if it is available. This is accomplished by maximizing the contributions made, especially if the employer matches 100%. As a final point, tapping into assets such as a home can bring extra income for a comfortable