Time Value of Money and Investment Appraisal

Learners will be able to:

• Explain the concept of the time value of money.
• Calculate present and future values.
• Calculate simple and compound interest.
• Analyze annuities and loan repayments.
• Apply financial formulas using spreadsheets.
• Calculate ARR, payback period, NPV, PI and IRR.
• Compare investment opportunities using financial criteria.
• Make evidence-based investment recommendations.

Part A — Time Value of Money

1. Time Value of Money
2. Interest Rates
3. Simple Interest
4. Compound Interest
5. Future Value
6. Present Value
7. Future Value of a Single Deposit
8. Present Value of a Single Deposit
9. Rule of 72
10. Annuities
11. Ordinary Annuities
12. Annuities Due
13. Present Value of Annuities
14. Future Value of Annuities
15. Mixed Cash Flows
16. Effective Annual Interest Rate
17. Loan Amortization
18. Time Value of Money Calculations

Part B — Investment Appraisal

1. Introduction to Investment Appraisal
2. Accounting Rate of Return (ARR)
3. Payback Period
4. Break-Even Point Analysis
5. Discounted Cash Flow (DCF)
6. Net Present Value (NPV)
7. Profitability Index (PI)
8. Internal Rate of Return (IRR)
9. Discounted Payback Period
10. Comparing Investment Appraisal Methods
11. ROI Analysis
12. Investment Decision-Making