Asked by Zachary Siegel on Jun 24, 2024
Verified
The concept that a dollar today is worth more than a dollar in the future is called
A) the net productivity of capital.
B) economic rent.
C) present value.
D) the capitalization of assets.
Present Value
The current value of a future sum of money or stream of cash flows, given a specified rate of return.
Economic Rent
It is the payment to an owner or factor of production in excess of the costs needed to bring that factor into production. In other words, it's the extra income earned from a resource without investing in additional effort or cost.
Net Productivity
The actual output after subtracting the inputs used in the production process, indicating the efficiency of production.
- Achieve proficiency in understanding the concept of present value and its sensitivity to variations in interest rates and time periods.
Verified Answer
SP
Shilvi PatelJun 29, 2024
Final Answer :
C
Explanation :
The concept being described is present value, which is the idea that money held today is worth more than the same amount of money held in the future due to the potential for investment and earning interest. The other options listed do not accurately describe this concept.
Learning Objectives
- Achieve proficiency in understanding the concept of present value and its sensitivity to variations in interest rates and time periods.