Time Value of Money (TVM)
Also called TVM
The TVM is a concept that simply states money today > money tomorrow. Reason being is that money today can be invested. This principle is rooted on the idea that the opportunity for you to invest money today offers the potential of future growth, while future payments are subject to risks and uncertainty.
In the room
TVM is the reason discounting exists at all. If you're asked why we discount future cash flows, this is the answer — money today can be invested, and future money carries uncertainty.