Question

When it comes to the Time Value of Money (TVM), which of the following is considered...

When it comes to the Time Value of Money (TVM), which of the following is considered to be the "Gold Standard?"

Internal Rate of Return (IRR).

Net Present Value (NPV).

Quick Ratio.

Discounted Payback Period

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Answer #1

The answer to the question is NPV (Net Present Value).

NPV is considered the gold standard when is comes to time value of money terms as it gives you the simple value in present value terms that what is the price to paid for a stream of cash flows with an initial outlay in present value terms. It is easy to calculate without any complications involved and is comparable with multiple projects and firms.

The other options are incorrect due to many disadvantages in their workflow like non application of time value, difficulty in analysis , calculation etc

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