why is the time value of money important 
the concept of the time value of money can help guide investment decisions for instance suppose a business can choose between project a and project b they are identical except that project a promises a 1 million cash payout in year one whereas project b offers a 1 million cash payout in year five the payouts are not equal the 1 million payout received after one year has a higher present value than the 1 million payout after five years 