This 9 page paper examines a case study supplied by the student, the paper examines why future income is worth less that the same amount received today. Using NPV calculation and influence diagrams the paper assesses a project to determine if advice would be to accept or reject the project proposal. The writer shows the student how to analyse each of the separate variables to reach a decision. The bibliography cites 7 sources.
Name of Research Paper File: TS14_TEproass.rtf
Unformatted Sample Text from the Research Paper:
means that money received in the future is not worth the same amount as money received today. Inflation will have an effect on the real value, meaning that the same
amount received today will buy more now that it would in a years time. This is the impact of inflation (Nellis and Parker, 2000, Elliott and Elliott, 1998). There is
also the opportunity cost. If money is received today, it is not only the purchase power, money can also be invested. If money is received in the future then the
investment return during that period is lost (Watts, 1998) However, this s examined, money in the future is worth less than money received today. When assessing a project where much
of the return is in the future, this means the return will be worth the actual figures quoted due to the impact of time as seen above. To assess the
return we can perform a calculation that discounts the future revenue streams to assess what the value will be in todays terms. b. If we look at influence diagramming this
is a tool which can be used to assess the different risks on a project. The influence diagram starts with the outcome and then works backwards looking at the different
influences and indicating the relationship, as the diagram is drawn more factors may be added. The focal point of the diagram is called the core, then the influences on that
are the branches, with twigs being the influences on the influences. Different stages, such as decision making stages are shown in different shapes (Curwin and Slater, 1998). If we consider
the project proposed we can construct a very simple influence diagram to demonstrate how this may be put together. c. Influence diagram d. With this we have identified two main