easy · Principles of Finance time-value-of-money
What is the primary reason why a dollar today is worth more than a dollar received one year from now?
- The government requires tax payments on future income but not current income.
- Banks charge service fees on future deposits but not on current ones.
- Future dollars are always backed by more physical gold than current dollars.
- The dollar today can be invested to earn a return over the intervening period.
Sign up free to see the explanation and track your rank →
More Principles of Finance time-value-of-money practice
- Which loan has the higher effective annual rate (EAR)?
- A perpetuity pays $100 every year forever. If the discount rate is 8%, what is the present
- According to the Pecking Order Theory, which of the following is a firm's least preferred
- What is the Multiple of Invested Capital (MOIC) for the equity investors?
- If the WACC is 10%, what is the Equivalent Annual Annuity (EAA) of Project A?
- What is the net profit per share for the investor?
- Using the formula for future value, what will the account balance be after 10 years?
- What is the primary difference between an 'Ordinary Annuity' and an 'Annuity Due'?