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3 A dollar today is worth more than a dollar to be received in the future because?
Wiki User
∙ 12y ago
there are two reasons.
1. A dollar today can earn interest so you will have more than a dollar in the future.
2. Inflation will reduce the purchasing power a dollar over time, so it's better to get the dollar today and spend it today because it won't buy as much stuff tomorrow.
Wiki User
∙ 14y ago
Wiki User
∙ 12y agoInflation will reduce purchasing power of a future dollar.
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Does inflation have anything to do with making a dollar today?
If I understand your question correctly, when dealing with inflation, a dollar earned today is worth more than a dollar earned at any time in the future. This has to do with the concept of the present value of money. Because inflation devalues the dollar over time, a dollar earned today is worth more than say, a dollar earned five years from now.
Dollar paid in the future is less valuable than a dollar paid today?
Yep. that's the whole concept of interest.
What is cost of 1 dollar today?
Which is the price of dollar today
What was the dollar exchange rate for the dollar in 1978?
because of the purchasing power of a particular country is increasing
An amount of money to be received in the future is worth less today than the stated amount?
Since we can reasonably expect that the process of inflation will continue, it follows that dollars in some future year will be worth less than the same number of dollars are worth today.
Why you need time value of money in analyzing fund flows?
Because a dollar received in the future is worth less to you than a dollar available to invest today. The further in the future you receive funds, the less is their value to you today.
Why is it important for managers to be familiar with time value of money concepts?
The fact that a dollar to be received next week is worth less than a dollar to be received today is important in finance because the value of a business firm is, fundamentally, the sum of the values today of all the dollars expected to be received by the business firm in the future.
Does inflation have anything to do with making a dollar today?
If I understand your question correctly, when dealing with inflation, a dollar earned today is worth more than a dollar earned at any time in the future. This has to do with the concept of the present value of money. Because inflation devalues the dollar over time, a dollar earned today is worth more than say, a dollar earned five years from now.
Dollar paid in the future is less valuable than a dollar paid today?
Yep. that's the whole concept of interest.
19 Why is a dollar worth more today than it will be worth tomorrow?
Because the dollar can be invested today and earn interest
What is the date of the year of the year of sorrow?
it can be today or tomorrow because today is not in your hand yesterday can be your past & tomorrow you don't know about your future because future can be your sorrow too!
Under what conditions must a distinction be made between money to be received today and money to be received in the future?
When idle money can earn a positive return.
Is it commonly known that a dollar some period in the future is not worth the same as a dollar today?
Yes, this is VERY common knowledge - known as inflation. (or very rarely, deflation).
Considering the deterioration of the dollar what is the best currency to be holding today?
Euro is the best because it has greater value because of the economy today
What was the value of the dollar in 1968?
One dollar in 1968 was worth the same as $6.58 cents today. The dollar is no longer worth as much because of inflation.
What is cost of 1 dollar today?
Which is the price of dollar today
What was the dollar exchange rate for the dollar in 1978?
because of the purchasing power of a particular country is increasing
