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

Question

Quizplus · Accepted Answer

Long-range investment decisions involve cash flows that occur over a period of time. The time value of money concept recognizes that money available at the present time is worth more than the same amount in the future due to the potential earning power of the money. Therefore, in long-range investment decisions, greater value is assigned to more immediate cash flows because they can be invested to earn more money. Options A and C do not consider the time value of money. Option D suggests using the payback method, which does not factor in the time value of money, and at least one other method, but does not provide enough information to determine which method would consider the time value of money.

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