Time Value of Money The time value of money represents compensation to lenders and investors for I. Risk. II. Expected inflation. III. Delayed consumption. a. I and II only. b. I, II, and III. c. I and III only. d. II and III only. Future Value Which formula is used to compute the future value of a single sum? a. FV = PV/(1 + i)" b. FV = PV x (1 + i)" c. FV = PV + (1 x 1)" d. FV = PV x 1/(1 + i)" Allowance for Doubtful Accounts A method of estimating bad debts that focuses on the income statement rather than the balance sheet is the allowance method based on: a direct write-off Ob. aging the trade receivable accounts c. the balance in the trade receivable accounts d. credit sales Future Value and Present Value The present value of $1 is Oa. $1 plus the interest compounded at a given interest rate for a given number of periods. b. How much a series of end-of-the-period cash flows of one dollar occurring at regular intervals will accrue to at a given periodic interest rate. c. How much one dollar will accrue to in a given number of periods at a given interest rate.. d. The value today of a $1 cash flow that will occur at a future date. Present Value Which formula is used to compute the present value of a single sum? Ca. PV = FV + (1 x)" b. PV = FV x (1 + i)" OC. PV = FV x 1/(1 + i)" d. PV = FV - FV x (1 + i)