Which of the following statements is FALSE?
A)Finding the present value (PV)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 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 (PV) and compounding are not the same. Compounding refers to the process of calculating the future value of an investment or loan by adding interest earned or charged over time. Present value is the current value of a future sum of money, discounted by a specified rate of return or interest rate to account for the time value of money.

Which of the Following Statements Is FALSE