"The objective of Financial management is wealth accrual over profit accrual, because profit accrual ignores Time Value of Money." Explain further. Why?
This is the statement I made but I need to back it up with why? Can you help me with that?
The objective of Financial management is wealth accrual over profit accrual, because profit accrual ignores Time Value of Money. All financial decisions recognize the importance of the concept ‘Time Value of Money'. Time Value of Money is one of the central ideas of finance for decision making. In business, investment is made today and returns are spread over a future period and companies want to know if the investment is desirable or not.