The time value of money concept is given consideration in long-range investment decisions by

Question

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The time value of money concept recognizes that a dollar received today is worth more than a dollar received in the future because of its potential to earn interest or be invested. Therefore, long-range investment decisions should assign greater value to more immediate cash flows. Investing only in short-term projects (Choice A) may limit potential returns, while weighting cash flows with subjective probabilities (Choice B) may be unreliable. Assuming equal annual cash flow patterns (Choice C) does not take into account the time value of money.

The Time Value of Money Concept Is Given Consideration in Long-Range