Financial Accounting
Financial Accounting
18th Edition
ISBN: 9781260706307
Author: Jan Williams
Publisher: Mcgraw-hill Higher Education (us)
Question
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Chapter B, Problem 1DQ
To determine

Explain the meaning of the phrase “time value of money”.

Expert Solution & Answer
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Explanation of Solution

Time value of money:

  • Time value of money is one of the most fundamental and basic concept of investing. The phrase “Time value of money” states that the value of money varies depending upon when it is received.
  • It is created on the basis of the idea that the amount of money that is available today can be invested to accumulate a larger amount in the future.

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