- Knowledge about the nature of investment projects;
- Understanding the differences between stated annual interest rates and effective annual rate.
- Nature of investment projects.
- The time value of money.
- Calculating the future value of a single sum of money.
- Calculating the present value of a single sum of money.
- Distinguishing between the stated annual interest rate and the effective annual rate.
- Calculating the effective annual rate, given the stated annual interest rate and the frequency of compounding.
- Solving time value of money problems when compounding periods are other than annual.
- Calculating the payback period – with a series of even and uneven cash flows.
- Annuity – calculating the future value of an ordinary annuity.
- Perpetuity – calculating the present value of a perpetuity.
- Calculating the net present value (NPV).
- Calculating the internal rate of return (IRR).