Strictly speaking, money has no time value, but money has time value.
Regardless of inflation, a dollar on the table is still a dollar in ten thousand years, and a dollar is different from tomorrow's.
The time value of money is the appreciation of money with the change of time in the use process, also known as the time value of funds. Under the condition of commodity economy, even without inflation, the value of equivalent currency is not equal in different periods. It should be said that today's 1 yuan money has greater economic value than the future 1 yuan money.
Usually equivalent to the social average profit rate without risk and inflation. In practice, the interest rate of one-year national debt is usually used as a reference.
The application of time value of money runs through all aspects of enterprise financial management: in fund-raising management, time value of money makes us realize that the acquisition of funds requires a price, and this price is the cost of funds.
The cost of capital is directly related to the economic benefits of enterprises, and it is the primary problem to be considered in financing decision-making; In project investment decision-making, the long-term nature of project investment determines that the time value of money must be considered. Net present value method and connotative rate of return method are both investment decision-making methods considering the time value of money. In securities investment management, the present value method of income is the main method of securities valuation, which also requires considering the time value of money.
The time value of money is an objective fact. According to the requirements of reliable accounting information quality, it is inevitable that the accounting practice of measuring the whole process of enterprise capital movement with money fully considers the time value of money.
Money is the product of commodity exchange, and it is a commodity that breaks away from the commodity world and acts as a universal equivalent in the process of commodity exchange. Commonly known as money.
Money (CCY) is a tool to measure prices, a medium to buy goods and a means to preserve wealth. It is a contract between property owners and the market about exchange rights, and it is essentially an agreement between property owners. Including currency and banknotes in circulation.
There are still many arguments about the nature of money. There are various concepts of money in economics. At first, it was defined by the function of money, and later it was defined as economic variable or policy variable. Traditionally, money has the following definitions:
Goods generally accepted for payment of goods, services and debts;
Goods as a medium of exchange have standards of value, storage, price and deferred payment;
Excessive supply or demand will cause excessive demand for other assets or supply assets;
Temporary residence of purchasing power;
Liquid assets that do not need to pay interest are the net wealth of the public;
The largest current assets related to national income, etc. ; In fact, the above six items all belong to the functional definition of money.
The latest monetary theory holds that money is a contract between the owner and the market about exchanging rights, and it is basically an agreement between the owners. I give what I have to the market in exchange for what I need, and money is the agreement of this process.
This theory can withstand strict falsification and logical argumentation, explains all economic phenomena related to money, and has been tested by all economic practices, thus ending the debate about the nature of money for hundreds of years.