Why Is It Usually Necessary to Use the Time Value

question 79

Multiple Choice

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

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

---

Definitions:

Male

Referring to the sex that produces small, mobile gametes (typically sperm) in sexually reproducing organisms.

Female

A sex that is typically associated with producing ova or eggs and possessing XX chromosomes in mammals, including humans.

Scarcity

A situation in which something is not available in sufficient quantities to satisfy the demand for it.

Rights

Entitlements or privileges that are guaranteed by law or moral principles, allowing individuals to act or be treated in certain ways.