A method by which one can compare cash flows across time-either as what a future cash flow is worth today (present value)or what an investment made today will be worth in the future (future value)-is called
A)time-value of money.
B)compounding.
C)simple interest.
D)opportunity cost.

Question

Quizplus · Accepted Answer

The method described in the question is known as time-value of money. It involves calculating the present value or future value of cash flows based on the time value of money (which takes into account inflation and potential earnings from investments). Compounding and simple interest are related concepts but do not fully capture the time value of money, and opportunity cost refers to the cost of choosing one option over another, which is not directly relevant to comparing cash flows over time.

A Method by Which One Can Compare Cash Flows Across