Which of the Following Statements Is FALSE About Valuing Cash

question 30

Multiple Choice

Which of the following statements is FALSE about valuing cash at different points in time?

• A) Finding the present value (PV) and compounding are the same.
• B) A dollar today and a dollar in one year are not equivalent.
• C) If you want to compare or combine cash flows that occur at different points in time, you first need to convert the cash flows into the same units or move them to the same point in time.
• D) The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.

---

Definitions:

Negligence

The failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation, leading to potential harm or loss.

Sole Proprietorship

A business structure where a single individual owns, operates, and is responsible for all aspects of the business.

Limited Liability

A legal structure that limits the financial responsibility of an organization's owners or shareholders to their investment in the company.

Corporation

A legal entity separate from its owners, with rights and liabilities, and the ability to enter into contracts, sue, and be sued.