Material Detail

As future leaders of both for-profit and not-for-profit organizations, students need to understand time value of money concepts as they apply to alternative ways of raising capital (cash). For example, a for-profit biotech company or nonprofit scientific research entity may need to purchase expensive new equipment without exhausting its cash reserves. One way these organizations may obtain the desired capital financing is through the issuance of bonds. In brief, when organizations sell bonds to investors, they promise to pay back the amount borrowed at some point in time in the future. In addition, the entity may promise to pay a stated rate of interest to the investor at periodic intervals. This problem-based tutorial provides students with an opportunity to practice applying time value of money concepts.

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