To put things in perspective, let’s consider a hypothetical example. Assume your boss offers to pay you one of two ways. They will either pay you 1,000 SGD today or 1,200 SGD in tomorrow. What do you do? Well, you pick the better option. But which one is it? As always, in finance and business, it depends.
In this example, it depends on the rate of return you can gain on the $1,000 at present value. If you believe you can make more than 20% – $1,200 is 20% of $1,000, then you should probably take the $1,000. In that case, $1,000 today are worth more than $1,200 tomorrow. Otherwise, the converse is the better option.