ABSTRACT
This chapter covers the fundamental concepts of the central role of time value of money in project management. The time value of money is an important factor in economic consideration of projects. This is particularly crucial for long-term projects that are subject to changes in several cost parameters, including interest rates and inflation. Both the timing and quantity of cash flow are important for project management. The evaluation of a project alternative requires consideration of the initial investment, depreciation, taxes, inflation, economic life of the project, salvage value, and cash flow timing.
