Time value of money is calculated by measuring costs of periods of time based on the net costs incurred during that period. This method is used to establish a real cost base for business operations and a general basis for quotes for services. The process is sometimes a debatable measure of cost in terms of describing costs of operations when these costs are normal costs, regardless of operational conditions.

Period of time: 5 hours

Cost of staff = $500 per hour              $2500

Cost of office space = $20 per hour      $100

Cost of equipment usage = $80 per hour    $400

Cost of consultant per hour = $85 per hour  $ 425

Net time value of money        $3425