Question

Esther. Vida and Clair were asked to consider two different cash flows: GH¢1000 that they

could receive today and GH¢3000 that would be received 3 years from today. Esther wanted
the GH¢1000 today. Vida chose to collect GH¢3000 in 3 years, and Clair was indifferent
between these two options. Which of the three women made the right choice? ​

Answer 1

Esther is right. Take the cash today

Explanation:

The value of money tends to decrease due to inflation. With GH¢1000 now, she can invest and work to earn more herself.