The Chief Financial Officer of Violet Motors Inc. recently mentioned in an interview that a dollar received today is worth more than a dollar received in the future because the sooner you receive a sum of money, the quicker you can put that money to work. The Chief Financial Officer was speaking about the _____.
A) present value of money
B) assumed value of money
C) future value of money
D) time value of money

Question

Quizplus · Accepted Answer

The Chief Financial Officer was speaking about the time value of money, which is the concept that a dollar received today is worth more than a dollar received in the future due to the potential to invest and earn a return on the money. Option A refers specifically to the current value of future cash flows, while option B is not a recognized financial term. Option C relates to the future worth of a current investment.