Time value of money is important because
A) you do not want to wait a long time to get paid.
B) deflation eats away at the value of a dollar.
C) the present value of future cash flows is affected by inflation.
D) time value of money is not as important to a person's finances as budgeting.

Question

Quizplus · Accepted Answer

The time value of money concept recognizes that the value of money is affected over time by factors such as inflation, which means a dollar today will not have the same purchasing power in the future. This principle is crucial in finance for evaluating the present value of future cash flows.

Time Value of Money Is Important Because