Time Value of Money


Why is the time value of money concept important? In what quantitative decisions might the time value of money be used?

In business the time value of money is very important because it allows business’s to determine how much an investment will increase in value over a determined amount of time. The way that the stock market, and how the government is going these days many people are putting their money that they earn into 401k’s or IRA’s which over a period of time will calculate the value of their investment. There is a variety of investment tools that are out there to help people with investing their money in any time of investment. Many people choose the high interest rate that normally pays off in the long run if the investment is not touched. Many people have decisions to make regarding different positions within their life. Student loans, and financing a home use the time value of money. The interest rates have dropped since the financial meltdown. Many students have ended up with the lower interest rates. You have to have a clear understanding of the time value of money are able to better analyze the risks that are involved with the investments, and can make the money work for them instead of against them. This is something that I wish I understood a little better so that I can make the money work better for me instead of against me. Most companies use the time value of money to compare their investment alternatives in regards to profits, and earnings. These companies also use time value of money with leases, annuities, savings, mortgages, and loans. In order to make the right decisions for the company time value of money should be the top priority for any business to make solid financial decisions.

Foreign Markets


3) What might be the special problems of small businesses entering foreign markets? Discuss at least two problems that might be encountered. How might these problems be approached to create a successful marketing campaign? When might it be best to market a product or service only locally?
There are two significant problems that either a large or small business can run into when entering the foreign market place. Failing to adapt a product and to make it market appropriate can cause marketing issues for the business. Going through the wrong distribution channels will cause a desired product to never reach the destination that is intended. Many restaurants have different types of products on their menu’s depending on what type of customer’s they have coming into their establishment. Not every McDonald’s is going to have the same menu items that we have here in my home town. Every culture and every business has their own taste’s and marketing techniques. It is up to the business to know how to market to the right types of consumer’s in order to make the product a success. All business’s have different items for different types of customer’s. Waffle House serves eggs and different types of items to their customer’s while Cracker Barrel offer’s more with the dinner’s they serve. The whole idea behind being in business is attracting different types of people to your establishment and by offering items or products that will entice the consumer to come in. It will also give the word of mouth marketing that every company seeks to find from the customer’s. Finding that niche within the market will also help in getting the product or service to be a success.