Why Is It Usually Necessary to Use the Time Value

question 9

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 received 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.

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Definitions:

Jonah Complex

The fear that maximizing our potential will lead to a situation with which we will be unable to cope.

Neurotic Needs

Neurotic needs are compulsive attachments or strategies that individuals develop to cope with feelings of insecurity and anxiety, according to psychoanalytic theories.

Irrational Defenses

Mental strategies that are logically flawed used by individuals to protect themselves from feelings of anxiety or guilt.

Anxiety

Anxiety is a feeling of fear, dread, or apprehension, often with no clear justification. It can affect both the mind and the body, leading to physical symptoms as well as psychological distress.