C) It is computed using annual cash flows. D) It is computed using estimates E)
ID: 2596932 • Letter: C
Question
C) It is computed using annual cash flows. D) It is computed using estimates E) All of the above answers is correct 6. Which of the following is NOT a definition of the required rate of return? A) The discount rate B) The accounting rate of return. C) The hurdle rate. D) The cost of capital. E) All of these answers are definitions. 7. In order for a company to accept a project based on Net Present A) NPV must be less or equal to zero. B) NPV must be greater or equal to zero C) NPV must be greater than zero. D) NPV must be greater than IRR E) NPV cannot be used to accept projects Which of the following is NOT a purpose of a postaudit? A) Compare actual benefits with estimated benefits. B) Compare actual cash flows with estimated cash flows. C) Propose D) Punish managers for their bad estimates. E) Learn to calculate more accurate estimates. e action, if needed When a current financial statement amount is expressed as a percentage of a prior-period amount, it is referred to as A) Common size analysis. B) Ratio analysis. tal analysis. Vertical analysis. E) None of the answers is correct 10 Which of the following is an advantage of financial statement analysis using percentages? A) Percentages eliminate the effect of size. B) Percentages are easy to calculate C) Percentages are more accurate than dollar amounts. D) Percentages provide more information. E) None of the above answers is correct.Explanation / Answer
6) B) The accounting rate of return
7) B) NPV must be greater or equl to zero.
8) D) Punish managers for their bas estimates
9) C) Horizontal analysis
10) A) Percentage eliminate the effect of size.
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