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

Question

Quizplus · Accepted Answer

All of these options are correct. The time value of money emphasizes the importance of earning a return on investment, recognizes that money today is worth more than the same amount in the future due to inflation and the opportunity cost of not investing it today, and can be used to analyze and compare different cash flow streams.

The Concept of Time Value of Money Is Important to Financial