What financial principle states that money available at the present time is worth more than the identical sum in the future due to earning potential?

Explanation

• Time Value of Money (TVM) establishes that a dollar received today is worth more than a dollar received in the future.
• TVM concepts underpin compound interest calculations, present value discounting, and capital budgeting (NPV/IRR).
• Key TVM components include Present Value (PV), Future Value (FV), Interest Rate ($r$), and Time ($n$).