Which of the following statements is FALSE?
A)Finding the present value (PV)and compounding are the same.
B)The equivalent value of two cash flows at two different points in time is sometimes referred to as the 'time value' of money.
C)A dollar today and a dollar in one year are not equivalent.
D)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.

Question

Quizplus · Accepted Answer

Finding the present value (PV) and compounding are not the same. Compounding refers to the process of earning interest on interest, while finding the present value refers to calculating the value of cash flows at a specific point in time, based on a discount rate.

Which of the Following Statements Is FALSE