The time value of money is based on the concept that:a.Money depreciates over timeb.Money has a fixed value over timec.Money can be invested to earn returns over timed.Money has a different value in different countries
Question
The time value of money is based on the concept that:a.Money depreciates over timeb.Money has a fixed value over timec.Money can be invested to earn returns over timed.Money has a different value in different countries
Solution
The time value of money is based on the concept that:
c. Money can be invested to earn returns over time
This concept implies that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.
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