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:

Claim Arose

The point in time at which the facts or circumstances that give rise to a legal claim occurred or were identified.

Accountant-Client Privilege

A legal privilege that works to keep confidential communications between an accountant and their client protected from disclosure, similar to attorney-client privilege.

Statutory Law

Law enacted by a legislative body, such as Parliament or Congress, distinct from case law or common law.

Common Law

A body of law developed through court decisions and case law, rather than through legislative statutes or executive action.