Explain Concept Time Value Money Important Long Term Project Decisions Q34234167

Explain why the concept of time value of money important tolong-term project decisions.

Expert Answer

Time Value of Money is a concept which focuses on the value ofmoney with different period of time. Value of money is notabsolute. It changes with time. The value of 1000$ in 2010 wasdifferent than today and it will be different in future. It isaffected by economic condition of the country and no a day globaleconomy. In simple terms it is affected by the rate of inflationand rate of interest at the point of time.

For long term projects, the business person has to borrow themoney from