The notion that $1 in the future is not the equivalent of $1 today is referred to as ____________________
A)The rate of return
B)An opportunity cost
C)The intrinsic value
D)The time value of money

Question

Quizplus · Accepted Answer

The concept of the time value of money states that the value of money today is worth more than the same amount of money in the future because of its potential earning capacity. Therefore, Option D is the correct answer. Option A refers to the percentage increase or decrease in the value of an investment over a period of time. Option B refers to the cost of forgoing an alternative choice. Option C refers to the inherent worth of an asset or investment.

The Notion That $1 in the Future Is Not the Equivalent