Discuss the significance of recognizing the time value of money in the long-term impact of the...

Question

Question

Discuss the significance of recognizing the time value of money in the long-term impact of the capital budgeting decision.

Answer 1

Answer #1

Answer:

Time value of money puts various speculations on an equivalent time skyline or horizon

Perceiving or recognizing the time value of money in the long haul effect of the capital budgeting decision is more significant because:

Inflation diminishes values after some time; for example $ 1,000 today will have less worth quite a while or five years from now because of rising costs (Inflation).
Vulnerability or uncertainty in the future.
Opportunity Costs of cash; $ 1,000 today is worth more to us than $ 1,000 five years

Answer 2

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