Answer (A) is correct. The time value of money is concerned with two issues: (1) the investment value of money, and (2) the risk (uncertainty) inherent in any executory agreement. Thus, a dollar today is worth more than a dollar in the future, and the longer one waits for a dollar, the more uncertain the receipt is. The cost of capital involves a specific application of the time value of money principles. It is not a basic concept thereof.