Why Is It Usually Necessary to Use the Time Value

question 101

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 than benefits.
• B)In most investment projects costs are incurred up front,but benefits are provided in the future.
• C)For practical purposes,a dollar today may be considered to be equal to a dollar at some future time.
• D)Although costs and benefits generally occur concurrently,the benefits will accrue value over time,due to interest.
• E)Since money is worth more in the future,if the time value of money is not considered,profitable investments will be passed up.

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Definitions:

Self-Interest

The consideration of one's own advantage or well-being above those of others or the common good.

Mission Statement

A formal summary of the aims and values of a company, organization, or individual, guiding its strategies and decision-making processes.

Key Values

Fundamental beliefs or standards that guide behaviors and decision-making within individuals or organizations.

Ideological Themes

Central beliefs or principles that form the basis of a political, economic, or social system or movement.