The concept of time value of money is important to financial decision making because
A)it emphasizes earning a return on invested capital.
B)it recognizes that earning a return makes $1 worth more today than $1 received in the future.
C)it can be applied to future cash flows in order to compare different streams of income.
D)All of these options

Question

Quizplus · Accepted Answer

The concept of time value of money is important in financial decision making because it emphasizes earning a return on invested capital, recognizes that earning a return makes $1 worth more today than $1 received in the future, and can be applied to future cash flows in order to compare different streams of income. Therefore, all the options (A, B, and C) are correct.

The Concept of Time Value of Money Is Important to Financial