Why is it usually necessary to use the time value of money when performing a cost-benefit analysis?
A)For an investment project to be considered,costs must have a higher dollar value than benefits.
B)In most investment projects costs are incurred up front,but benefits are provided in the future.
C)For practical purposes,a dollar today may be considered to be equal to a dollar at some future time.
D)Although costs and benefits generally occur concurrently,the benefits will accrue value over time,due to interest.
E)Since money is worth more in the future,if the time value of money is not considered,profitable investments will be passed up.

Question

Quizplus · Accepted Answer

The time value of money is important in cost-benefit analysis because costs are typically incurred at the beginning of a project, while benefits are realized over time. This concept recognizes that a dollar today is worth more than a dollar in the future due to its potential earning capacity.

Why Is It Usually Necessary to Use the Time Value