Time value of money is a critical concept in financial accounting and decision making with regards to investments. The inflation of interest rates is not factored when calculating the time value of money. The article by Muda and Hasibuan (2018) was written based on research whose objective was to investigate the level with which the members of the public are informed about the concept of time value of money as well as the risks with which it poses to investments. The research collected primary data by the use of questionnaires which were dished out to one hundred and twelve sample respondents; members of the public. Subsequently, this research applied PLS software to guide through the process of data analysis.
The article reports the findings of the research. The research found out that the members of the public are to a very substantial extent unaware of the implications of the concept of time value of money to the economy and any risks that it may bring about to the expectations of returns on investments in any industry. Nevertheless, the research also had limitations, and one of these was the fact that the investigation was conducted on a heterogeneous area which comprised of people of varied behavior and economic activities and social life. The study was only concentrated in one city and did not extend to any other area other than the original place of study. It is important to note that the research presented in this article has substantial effects on the people's understanding of the theory of time value of money and what it means to say that a dollar today is worth more than a dollar tomorrow. Additionally, the study exhibits worth because it compares the value of time economically to the people's know-how of the theory of time value of money.
Delegate your assignment to our experts and they will do the rest.
Reference
Muda, I., & Nasibuan, A. H. (2018). Public Discovery of the Concept of Time Value of Money with Economic Value of Time. In Proceedings of MICoMS 2017 (Emerald Reach Proceedings Series, Volume 1) (pp. 251-257). Emerald Publishing Limited.
