The time value of money refers to the issue of:
A) what the value of the stream of future cash flows is today.
B) why a dollar received tomorrow is worth more than a dollar received today.
C) why a dollar received tomorrow is worth the same as a dollar received today.
D) None of the above.

Question

Quizplus · Accepted Answer

The time value of money refers to the concept that the value of money changes over time due to factors such as inflation, interest rates, and opportunity cost. Therefore, the correct answer is A, as it addresses the issue of determining the value of future cash flows in today's dollars. Option B is incorrect because it suggests that a dollar received tomorrow is worth more, which is true due to the time value of money. Option C is incorrect as it implies that there is no time value of money. Option D is incorrect as it does not offer a valid answer.

The Time Value of Money Refers to the Issue Of