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:

Replenished

The process of filling up or restoring a stock or supply of something to its previous level or condition.

Every Day

A term denoting something that occurs regularly each day; however, in a financial or business context, it might refer to daily operations or tasks but this usage is not specific.

Petty Cash Fund

A small amount of cash kept on hand in a business for covering minor, routine expenses without issuing checks or electronic payments.

Journal Entry

A record in accounting that represents a transaction where there is at least one debit and one credit in the company's accounts.