Final answer:
The necessary element of present value measurement is considering the time value of money. Present value calculations involve determining the current worth of future cash flows by discounting them back to the present using an appropriate discount rate.
Step-by-step explanation:
The necessary element of present value measurement is considering the time value of money.
Present value calculations involve determining the current worth of future cash flows by discounting them back to the present using an appropriate discount rate.
For example, if you were to receive $1,000 one year from now and the discount rate is 10%, the present value of that $1,000 would be $909.09.