Illustrate the Time Value of Money
The value of a dollar today is likely more than what it will be worth a year from now. The reason for this is because of the time value of money. As the project progresses the value of money to be spent in the future, be it in one year or five years, needs to be evaluated and factored into the overall project. The project manager will need to understand the value of the funds to be utilized over the duration of the project.
Review the resources listed in the Books and Resources area below to prepare for this week’s assignment(s).
Books & Resources:
Book
Kerzner, H. 2009 Project management: A systems approach to planning, scheduling, and controlling.
Instruction:Read Chapter 14 (14.23-14.30).
Article/Journal
Abdul-Rahman, H., Wang, C., & Muhammad, N. B. (2011). Project performance monitoring methods used in Malaysia and perspectives of introducing EVA as a standard approach. http://go.galegroup.com.proxy1.ncu.edu/ps/i.do?&.1&&&&&&&~%22Project+Performance+Monitoring+Methods+used+in+Malaysia+and+Perspectives+of+Introducing+EVA+as+a+Standard+Approach%22~~S
Instruction:Read aticle.
Bianco, C. A. (2010). Teaching time value of money. http://search.proquest.com.proxy1.ncu.edu/docview/818356218?
Instruction:Read aticle.
Burkholder, S. (2011). FASB, IASB affirm revenue proposal on time value of money; Call for exceptions. http://search.proquest.com.proxy1.ncu.edu/docview/861501267?
Instruction:Read aticle.
Gale Cengage Learning (2011). Value of time and money. http://go.galegroup.com.proxy1.ncu.edu/ps/i.do?%7CA264480404&.1&&&&
Instruction:Read article.
Sito, P. (2012, May 30). Value of contracts in dispute falls region in line with global trend – but they still cost the building industry significant time and money. South China Morning Post [Hong Kong]. http://search.proquest.com.proxy1.ncu.edu/docview/1017601926?
Instruction:Read aticle.
Spend some time to teach value of money. (2011, Jul 01). http://search.proquest.com.proxy1.ncu.edu/docview/874386863?
Instruction:Read aticle.
Tough economic times create ‘value for money’ opportunities. (2012). M2 Presswire [Coventry]. http://search.proquest.com.proxy1.ncu.edu/docview/922970990/13FDDAD46623694DF4D/1?
Instruction:Read aticle.
Assignment: Illustrate the Time Value of Money
Instructions:
As the project manager, in a paper, explain how the time value of money will impact your project. Demonstrate by example from your project why it is important for companies to consider the time value of money when selecting projects to undertake:
How can delaying a project task decision affect the time value of money in a positive way?
In a negative way?
Include as an appendix to your paper a projection of the costs of your project for in excess of one (1) year. Create a spreadsheet that illustrates your interpretation of the results and will identify at what point in your project decisions will have an effect on the cost of money.
Hint: It is realized the example may not be totally accurate and aligned with the project, but for explanation purposes propose a brief scenario within your paper that aligns with the project as closely as possible and will allow you to explain by example the time value of money.
Support your assignment’s response with a minimum of three (3) external resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 4-6 pages not including title and reference pages plus appendix: Spreadsheet with sufficient detail to demonstrate knowledge of time value of money calculations and a supporting explanation of the calculated results
Your response should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.
