Finance (Basic) Ludek Benada Department of Finance Office 533 75970@mail.muni.cz Time Value of Money Why is a dollar tomorrow less worth than a dollar today? n Opportunity costs n Purchasing power of money Future Value Is a value of an asset in a specific day in the future. Present Value PV = df x CF Discount Factor DF is the value today of $1 received in the future. Net Present Value NPV = PV – required investment Cumulative Net Present Value Present Value of Perpetuity Risk and Present Value A safe dollar is worth more than a risky one. Thank you for your attention