Why Is a Dollar Today More Valuable Than a Dollar

question 187

Multiple Choice

Why is a dollar today more valuable than a dollar a year from now?

• A)The dollar today can be immediately used to buy something.
• B)A dollar a year from now will likely have less purchasing power because of inflation.
• C)The unknown future is riskier than the known present.
• D)All of these

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Definitions:

Average Inventory

The mean value of inventory held by a business over a specific period of time, used to evaluate the investment in inventory against sales performance.

Ending Inventory

The complete valuation of items that are up for sale at the end of a financial accounting period.

Beginning Inventory

The value of all the inventory held by a company at the start of an accounting period, before any purchases or sales are made.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in managing stock.