15 Evaluating Flows of Money
Objectives and Learning Outcomes
This chapter introduces methods that can be used to evaluate cash flows arising over time from business activity, investments, or projects. After presenting a range of simplistic methods, the chapter introduces a group of extremely widely used techniques known as compounding methods. This is accompanied by an introduction to a range of relevant concepts, including time preference, interest rates, compound interest, discount rates, net present value, and various rates of return. This chapter aims to achieve the following learning outcomes:
- an appreciation of how cash flows can be expressed as a series of flows of money occurring over time;
- the ability ...
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