Which of the following statements is FALSE?
A)Finding the present value and compounding are the same.
B)A dollar today and a dollar in one year are not equivalent.
C)If you want to compare or combine cash flows that occur at different points in time,you first need to convert the cash flows into the same units and/or move them to the same point in time.
D)The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.

Question

Quizplus · Accepted Answer

Finding the present value and compounding are not the same. Present value is the process of determining the value of a cash flow or series of cash flows in today's dollars, while compounding is the process of determining the future value of an investment by applying interest earned over time.

Which of the Following Statements Is FALSE