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Prior to beginning work on this discussion, read Chapter 9: The Time Value of Money in your textbook.

If a company wishes to purchase new equipment, it must have capital. But, before making any purchase, the financial manager needs to decide if the benefits of the new equipment outweigh the present and future benefits of the capital. For this discussion, address the following:

  • Summarize the concept of time value as it relates to money.
  • Explain how managers estimate the future benefits of capital.
  • Analyze how the time value of money impacts capital investment decisions.