Question

A principle that a dollar is worth more the sooner it is to be received, all...

A principle that a dollar is worth more the sooner it is to be received, all other things equal, is:

the time value of money

the value of money

Fisher's effect

net present value
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Answer #1

Money that is obtained sooner can be put to productive use such as can be invested in fixed deposits at banks to earn interest on them or can be lend to someone to get interest amount from them. So, dollar that is received today has more value because it can generate interest income sooner and more then the dollar received later.

Thus value of certain amount of money today is more in comparison to value of money tomorrow. This principle is called time value of money.

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