TVM is used to value a project or a company.
Dec 27 2012 11:07 AM
The best way to value any project is using its cash flows - since thats what is remaining after all expenses etc.
Hence TVM is applied to the Cash Flow metric
For example if you had to determine what is your net worth - then just your salary/revenue is a bad indicator. You have to subtract your liabilities/expenses and the final amount is your net worth.
The same applies to companies and projects.