To measure value,the concept of time value of money is used
A) to determine the interest rate paid on corporate debt.
B) to bring the future benefits and costs of a project, measured by its expected profits, back to the present.
C) to bring the future benefits and costs of a project, measured by its cash flows, back to the present.
D) to ensure that expected future profits exceed current profits today.

Question

Quizplus · Accepted Answer

The time value of money is used to bring the future cash flows of a project back to the present. This allows for the comparison of the project's present value to its costs, and helps in determining its overall value. It is not used to determine interest rates, nor does it guarantee that future profits will exceed current profits.

To Measure Value,the Concept of Time Value of Money Is