Which of the Following Describes the Time Value of Money

question 61

Multiple Choice

Which of the following describes the time value of money?

• A) The time value of money has no effect on the timing of capital investments.
• B) Money loses its purchasing power over time through inflation.
• C) The fact that invested cash may not earn interest over time is called the time value of money.
• D) A dollar received today is worth more than a dollar to be received in the future.

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Definitions:

Organizing

The process of arranging resources and tasks to achieve objectives efficiently and effectively.

Normal Curve

A theoretical distribution of scores where the mean, median, and mode all share the same value and an equal percentage of scores fall on either side of the distribution. Also called a bell-shaped curve based on the visual form this type of distribution takes when graphed.

Smooth Curve

A type of curve in graphical representations that is continuously differentiable and does not have any sharp angles or breaks.

Frequency Polygon

A graphical representation of the distribution of numerical data, where a continuous line connects points representing the frequency of scores within intervals.