Question

What is the principle b TO time value of money? CY Select one: O a. Projects with more risk have a lower discount rate. b. Mo
0 0
Add a comment Improve this question Transcribed image text
Answer #1

The time value of money (TVM) is a concept that says money available at the present time is worth more than the same amount of money in the future.

Hence, the principle behind the time value of money is that money today is worth more than money tomorrow.

Answer: Option (D)

Add a comment
Know the answer?
Add Answer to:
What is the principle b TO time value of money? CY Select one: O a. Projects...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Which of the following statements is INCORRECT? A) In general, money today is worth more than...

    Which of the following statements is INCORRECT? A) In general, money today is worth more than money in one year. B) We define the risk-free interest rate, rf for a given period as the interest rate at which money can be borrowed or lent without risk over that period. C) We refer to (1 - rf) as the interest rate factor for risk-free cash flows. D) For most financial decisions, costs and benefits occur at different points in time. Suppose...

  • Which one of the following statements correctly defines a time value of money relationship? Multiple Choice...

    Which one of the following statements correctly defines a time value of money relationship? Multiple Choice 2.5 points eBook • Time and future values are inversely related, all else held constant. Print References O Interest rates and time are positively related, all else held constant. O An increase in a positive discount rate increases the present value. O An increase in time increases the future value given a zero rate of interest. O Time and present value are inversely related,...

  • Which of the following statements about the time value of money concept is true? It assumes...

    Which of the following statements about the time value of money concept is true? It assumes that people prefer to consume things at some time in the future rather than today. It assumes that inflation rate remains constant for the foreseeable future. It means a dollar received today is worth more than a dollar received tomorrow. It refers to the fact that higher cash flows in earlier years are less desirable

  • The concept of the time value of money generally implies that: Question 2 options: a dollar...

    The concept of the time value of money generally implies that: Question 2 options: a dollar today is worth less than a dollar tomorrow you should spend all your money today and not save for the future profit, not cash flow, is important in valuation a dollar today is worth more than a dollar in the future none of the above are correct Could you finish the test its 25 questions ill tip you a extra session

  • OILCOPICA How is risk accounted for in the time value of money calculations? Question 6 Not...

    OILCOPICA How is risk accounted for in the time value of money calculations? Question 6 Not yet answered Points out of 1.00 P Flag question Select one: a. Higher risk is accounted for by moving the cash flow further back in time. b. Higher risk is accounted for by raising the present worth using the corresponding risk multiplier. c. Higher risk is accounted for by subtracting a corresponding dollar amount from the expected future cash flow. d. Higher risk is...

  • What is the major disadvantage of the internal rate of return method? Select one: a. It...

    What is the major disadvantage of the internal rate of return method? Select one: a. It can produce more than one internal rate of return. O b. It ignores the expected service life. c. It discriminates against long-term projects. O d. It complicates the comparison of projects of the different sizes. o e. It ignores the time value of money.

  • please answer all the multiple choice quesrions Time value of money is closely associated with the...

    please answer all the multiple choice quesrions Time value of money is closely associated with the idea of: ООО Investing in a variety of different securities A dollar today is worth more than a dollar tomorrow Inability to pay out profits as opposed to cash Security prices quickly reflect new information True False Problems with payback include - it ignores cash flows beyond the payback period What is the present value of $1,800 to be received nine years from now...

  • 1. The time value of money refers to the fact that money has an opportunity cost,...

    1. The time value of money refers to the fact that money has an opportunity cost, i.e., its reinvestment rate. a. True b. False 2. If the payback period is used as the criterion for assigning priorities to investment projects, the highest priority will be assigned to projects with the shortest payback period. a. True b. False 3. The _______________ is the discount rate that makes the present value of the benefits generated by a project equal to the investment....

  • Use what you have learned about the time value of money to analyze each of the...

    Use what you have learned about the time value of money to analyze each of the following decisions: (PLEASE SHOW WORK) Decision #1:   Which set of Cash Flows is worth more now? Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive: Option A: Receive a one-time gift of $10,000 today. Option B: Receive a $1600 gift each year for the...

  • Use what you have learned about the time value of money to analyze each of the...

    Use what you have learned about the time value of money to analyze each of the following decisions: Decision #1: Which set of Cash Flows is worth more now? Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive: Option A: Receive a one-time gift of $10,000 today. Option B: Receive a $1600 gift each year for the next 10 years....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT