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.

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Definitions:

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Unconscious encoding of information about space, time, frequency, and well-practiced tasks, requiring minimal cognitive effort.

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