The concept of ________ is based on the notion that a dollar paid to you in the future is less valuable to you than a dollar today.A) present valueB) future valueC) interestD) deflation
A) present value
The concept of present value is based on the notion that a dollar paid to you in the future is less valuable to you than a dollar today. Present value is the current value of a future sum of money or stream of cash flows given a specified rate of return. It takes into account the time value of money, which means that money received in the future is worth less than the same amount of money received today due to inflation and other factors. By discounting future cash flows back to their present value, individuals can accurately evaluate the potential profitability of an investment and make informed financial decisions.
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