Why Is It Usually Necessary to Use the Time Value

question 44

Multiple Choice

Why is it usually necessary to use the time value of money when performing a cost-benefit analysis?

• A) For an investment project to be considered, costs must have a higher dollar value from benefits.
• B) Although costs and benefits generally occur concurrently, the benefits will accrue value over time, due to interest.
• C) In most investment projects costs are incurred up front, but benefits are provided in the future.
• D) For practical purposes, a dollar today may be considered to be equal to a dollar at some future time.

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Definitions:

Sociohistorical Context

The combination of social, cultural, and historical factors that influence and shape events or phenomena at a given time.

Fundamental Disputes

Essential disagreements or debates over basic principles within a field of study or an area of professional practice.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Functionalism

A theory in sociology and anthropology that interprets and describes society as a structure with interrelated parts designed to meet the biological and social needs of the individuals in that society.