Why Does $100 Due One Year from Now Have Less

question 119

Essay

Why does $100 due one year from now have less economic value than $100 has today? What do you need to know before you can determine the difference between the economic values of the two payments?

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Definitions:

Total Units

The aggregate quantity of units produced, held in inventory, or sold by a business.

Transferred Out

In cost accounting, refers to the cost of goods or inventory items that have been moved from one production process or department to another.

Units Transferred Out

In process costing, the term refers to the number of units moved from one production department to the next, or to the completed goods inventory.

Units Started

The total number of units of product that began production during a specific period.