Question

Time affects the value of financial transactions because: Select one: A. there is an opportunity cost...

Time affects the value of financial transactions because: Select one: A. there is an opportunity cost to a lender when he/she lends money B. inflation makes money worth more over time. C. it takes time to gather information about financial transactions. D. very wealthy people require compensation for holding their money.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

There are various reasons behind time value of money i.e. time affecting value of fiancial transaction. The value of money available now is worth more than same amount available in the future due to earning potential of money. The amount of money is worth more,the sooner it is received. Also inflation make money, worth a lesser amount in future. There are various uses of money such as investing in shares or other fianacial instruments,save in bank accounts who provides interest on them,lend to someone who in return pays interest etc. The opportunity cost of money is the value of option given up for another option.

Hence answer is  A. there is an opportunity cost to a lender when he/she lends money

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Use the ideas of opportunity cost, marginal analysis, and sunk cost to give advice to the...
Use the ideas of opportunity cost, marginal analysis, and sunk cost to give advice to the following people: a. When Ursula goes to an all-you-can-eat buffet, she eats so much that she is sick for two days. But she says it’s OK, because it didn’t cost her anything extra. Your advice? b. Victor is thinking about starting a small business selling baseball caps in the shopping mall. He tells you that if he makes a financial investment of $10,000 and...
1. A dollar received today is worth more than a dollar received tomorrow because of: (select...
1. A dollar received today is worth more than a dollar received tomorrow because of: (select all that apply) none of the other answers are correct opportunity cost of time prices rise over time inflation 2. Your analysts tell you that compared to last year, Firm A increased its financial leverage ratio by 60% and Firm C decreased its financial leverage ratio by 11%. Based on this information alone, what can we say about the performance of Firms A and...
[9] An opportunity cost: A) exists only for decisions involving expenditures of money. B) exists because...
[9] An opportunity cost: A) exists only for decisions involving expenditures of money. B) exists because there is only one way money and time can be spent. C) is equal to the value of what is given up to make a purchase or take an action. D) accompanies every decision made by individuals and businesses, but not by government because that reflects the wishes of society. [10] The opportunity cost of a purchase is: A) zero if the item is...
2) If time has value, why are financial institutions often willing to extend you a 30-year...
2) If time has value, why are financial institutions often willing to extend you a 30-year mortgage at a lower annual interest rate than they would charge for a one-year loan? a) With a mortgage, the house you purchase acts as collateral for the loan. This reduces the risk associated with the loan and so reduces the compensation the bank requires. b) Because time has value, banks charge a lower interest rate on mortgages because they receive repayments for 30...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes. b. According to Keynesians, fiscal policy is the first line of defense against economic downturns. c. Advocates of sacrifice ration claim that a zero-inflation target imposes only small costs on society. d. Sacrifice ration implies that a credible commitment to reducing inflation can lower the costs of disinflation by inducing a...
16.Which of the following is true about sexual harassment in the workplace? Select one: a. It...
16.Which of the following is true about sexual harassment in the workplace? Select one: a. It refers to unwelcome sexual advances that affect an individual’s employment. b. The victim has to necessarily be of the opposite sex. c. The harasser has to be the victim’s direct supervisor in the same area—a nonemployee or another supervisor cannot be named as the harasser. d. Only the person harassed is the victim of sexual harassment. e. It occurs only with economic injury to...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the central bank conducts open market sales following fiscal expansion c. income is stimulated via a tax cut rather than an increase in government spending d. the central bank conducts open market purchases following fiscal expansion e. the LM-curve is horizontal An asset (other than money) is considered to be more liquid if Select one: a. it can be quickly and cheaply transferred into money...
36. When John comes home from work one evening, he finds that the leaves in his...
36. When John comes home from work one evening, he finds that the leaves in his front yard have been raked and put in bags. Later, a man comes to collect for the yard work done. John refuses to pay for the work since he has never seen the man before and did not hire him to do his yard work. Which of the following answers is most accurate? a. This is an implied, unilateral contract and John must pay...
________ client-centered therapy centers on the patient's goals and ways of solving problems. Select one: a....
________ client-centered therapy centers on the patient's goals and ways of solving problems. Select one: a. Rogers' b. Freud's c. Beck d. Ellis Question 2 Not yet answered Points out of 1.00 Flag question Question text A frequently prescribed drug therapy for managing one's depression is ____________. Select one: a. Adderall b. Lithium c. Prozac d. Thorazine Question 3 Not yet answered Points out of 1.00 Flag question Question text A major goal of modern inpatient psychiatric treatment is: Select...
As for the sales forecast for Year 1 through Year 3, these are some important variables...
As for the sales forecast for Year 1 through Year 3, these are some important variables I will go to consider for sales: Economy: The economic condition of the city, the province and the country are variables I need to consider for a sales forecast. If conditions are poor, people will spend less money on consumption. If economic conditions are great, then more people will have extra money to spend. Competition: I need to consider the level of competition I...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT