Determine the term- time value of money, Financial Management

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Determine the term- Time Value of Money

If an individual behaves rationally, then he wouldn't equate money in hand today with same value a year from now. As a matter of fact, he would prefer to receive today than receive after one year. Reasons cited by him for preferring to have the money today comprise:

1. Uncertainty of receiving the money later.

2. Preference for consumption today.

3. Loss of investment opportunities.

4. Loss in value because of inflation.

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