You are asked to calculate the time value of money that requires compensation for the delay in the receipt of cash. Which three of the following factors would you consider?
A) Risk
B) Net present value
C) Pure time value
D) Inflation

Question

Quizplus · Accepted Answer

Risk, pure time value, and inflation are factors directly related to the time value of money. Risk accounts for the uncertainty of future payments, pure time value reflects the preference for money now rather than later, and inflation affects the purchasing power of money over time. Net present value is a method to calculate the time value of money, not a factor to consider in its calculation.

You Are Asked to Calculate the Time Value of Money