Answer:
D. what the value of the stream of future cash flows is today
Explanation:
The times' value of money derives that today value or we can say the present value is more than the value earned at the future or future value because of the earning capacity due to inflation. As inflation rises, consumer spending become less as compare to before
Just take an example
If you invest $1,000 today that earns the interest rate at 10% for one year
So, the present value = $1,000
And, the future value = $1,000 × 1.1 = $1,100
So, today value is becoming more worth than the future value
The formula to compute the future value is shown below:
Future value = Present value × (1 + interest rate)^number of years
Note: The yoda is actually today. It is given wrong
