The present value of a particular future cash flow also rises with the discount rate. False
This idea helps us figure out how an investment will perform in the future. Discounting is one of the methods used to discover this concept. his enables us to determine whether our investment was sound.
What is money's value of time?
The idea behind the time value of money (TVM) is that a certain amount of money is worth more now than it will be in the future because it has the potential to earn money in the interim.A fundamental idea in finance is that money has a time value.Money in one's possession is worth more than money that will be paid for in the future.
What are the three components of money's value over time?
Money's time value is based on the idea that money today is worth more than money received in the future. Rates, time periods, present value, future value, and payments are the five most important parts of time value.
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