An important difference in the two types of choices, short-term and long-term is the time value of money, which does not require to be taken into account when doing short-term decisions, but does so when creating long-term, capital investment decisions. nike air max 1 ultra flyknit femme Johnny Cueto Jersey Nike AIR Max 2017 Goedkoop A dollar got today has higher value than a dollar to be got a year from now for three different reasons – risk, rising prices and interest.

To demonstrate, let’s say I buy some products from you on credit for a hundred dollars. Florida Gators Jerseys asics femme pas cher If I’m a frequent customer and tell you that I will put a check in the mail the next day, there is small risk that you will not be paid. Women Air Jordan 9 Andrelton Simmons Jersey Maglie Portland Trail Blazers If, however, I tell you I’ll pay you in one year the risk goes up significantly. Nike Air Jordan 4 Womens fjallraven kanken soldes Nike Air Max Italia I may become bankrupt in the next 12 months, I might die or I might run off to Mexico. Air Jordan 5 Uomo If I tell you I’ll pay you in two years, the risk level goes up even much more. adidas 2017 pas cher The more time the time among now and when you anticipate cash inflow from a venture, the more the doubt and the higher the risk of not receiving the cash.

Another aspect is raising prices. Nike Air Max pas chers Fjallraven Kanken 7L It is one of the most essential problems in the economics. nike air max 2016 kopen Soldes Chaussures Nike Air Max 2016 Heren Goedkoop Inflation erodes the purchasing power of money. NIKE AIR FOOTSCAPE mochilas kanken big If this coming year we have, say, 3 percent rising prices, that means that the common market basket of goods and services which costs $100 today will cost $103 this time next year. stan smith adidas dames Maglie New Orleans Pelicans Air Max 2015 Heren Goedkoop If I owe you $100 and don’t pay for a year, it has cost you $3 in buying power. Womens Jordan Retro 6 soldes air max 1 Nike Air Max Heren You want your cash now.

Economists like to assume all manner of things to make their argument, so let’s assume away risk and inflation for a moment. asics gel kinsei 4 uomo Air Jordan 3 Uomo Chaussures Nike Pas Cher baskets running asics We’ll assume that I’m absolutely reliable and there will be no rising prices during the next 12 months. Nick Chubb Georgia Football Jerseys Air Jordan 11 Kids nike air max 1 og femme Let’s further assume that you don’t have an immediate need for the hundred dollars I owe you. Nike Air Max TN Femme Nike Air Max 90 Heren Nike Air Max Thea Print Dame Now, would you be unsociable to whether I paid you now or in a year? No, you would not be unsociable. nike basketball shoes for sale in south africa goedkoop nike air max nederland new balance 373 femme noir Even though I might be completely reliable and there will be no inflation, you still want your money now instead of later because of the institution of interest.