Question

The time value of money is an important concept in __________.

Select one:

a. determining the frequency of cash flows.

b. valuing a series of future cash flows.

c. predicting discount rates.

d. adding the number of cash flows.

e. identifying the amount of cash flows.

Answer 1

Time value of money concept is an important concept that is used for valuing a seires of future cash flows.

Value of future cash flows cannot be decided without knowing time value of money concept, While other things like determining the frequency of cash flows, predicting discount rates,  adding the number of cash flows.,  identifying the amount of cash flows is not dependent on time value of money concept.

So answer is b, valuing a series of future cash flows.