Question

Is the following statement true or false based on the concept of the time value of money: $10,000 that I will receive two years from now is worth less ta me today than when I will receive it in two years. True False QUESTION

2 Suppose that the internal rate of return (IRR) of a project a company is considering is 15%, and the companys cost of capital 10%. Should the company consider Investing in this project? Yes No

Answer 1

Please find below the solution.. let me know if you need any clarification.

Statement is TRUE - $10,000 that I will receive two years from now is worth less ta me today than when I will receive it in two years.

As per time value of money concept money is worth more today than to be received in future because money has the compounding power.

Yes project should be accepted- Suppose that the internal rate of return (IRR) of a project a company is considering is 15%, and the companys cost of capital 10%. Should the company consider Investing in this project

Since IRR > required rate therefore project should be accepted.