Which statements describe time value of money?

The time value of money (TVM) refers to the principle that money available today is worth more than the same amount in the future due to its potential earning capacity and factors like inflation. Key statements describing TVM typically include:

1. Current funds are more valuable than future equivalents: A dollar today can be invested to earn a return (e.g., interest), making it worth more than a dollar received in the future.
2. Inflation erodes purchasing power: Over time, inflation reduces the value of money, so future dollars will buy fewer goods/services than present dollars.
3. Opportunity cost of capital: The forgone return from not investing current funds (e.g., interest lost) represents the opportunity cost, which drives TVM.
4. Measurement via present value (PV) and future value (FV): TVM is quantified by converting future cash flows to their present value (discounting) or projecting present values to future amounts (compounding).

For specific options, ensure they align with these principles. If unsure, consult a teacher for final confirmation.