The time value of money implies that a dollar in hand today is worth more than a dollar to be received in the future.

Question

Quizplus · Accepted Answer

This is because of the opportunity cost of not having the dollar in hand today. By investing or saving the dollar today, one can earn interest or return, which will increase the value of the dollar over time. Thus, a dollar today has a higher value than the same dollar in the future.

The Time Value of Money Implies That a Dollar in Hand