💼 Pre-MBA Exam Prep

The time value of money principle states that:

A Money loses value during inflation
B A dollar today is worth more than a dollar in the future due to its potential earning capacity
C Future money has higher value
D Interest rates are always positive

✓ Correct Answer: Option B

Time value of money: money available now can be invested to earn returns, making it worth more than the same amount received later. Foundation of all finance — NPV, annuities, bonds.

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