Answer:
The Concept related to the idea that 1 today is usually worth more than 1 at some future date is Present value. Option (1) is true.
Step-by-step explanation:
Present value is a financial concept that recognizes the time value of money, which suggests that a sum of money today is more valuable than the same sum in the future.
Time Value of Money:
The time value of money is based on the premise that a certain amount of money has different values at different points in time.
Factors such as inflation, opportunity cost, and risk contribute to the idea that a dollar today is generally worth more than the same dollar in the future.
Present Value (PV):
Present value is a financial calculation that determines the current worth of a future sum of money, discounted at a specific rate.
It represents the amount of money today that is equivalent in value to a future sum, considering the time value of money.
Discounting:
The process of calculating present value involves discounting future cash flows or sums back to their equivalent value in today's dollars.
The discount rate used in this calculation reflects the rate of return required or the opportunity cost associated with waiting to receive the money.
Thus, option (1) is true.