Payback includes the time value of money by reducing cash flows by the discount

ID: 426361 • Letter: P

Question

Payback includes the time value of money by reducing cash flows by the discount rate.

True

False

An organization’s strategic analysis of its strengths and weakness must include its finances.

True

False

Why would a company want to have a low average payment period?

Frees up cash for other purposes

Encourages vendors to provide higher discounts

Lowers discount rates

Indicates positive cash flow

A major difference between operating margin and net margin is that net margin accounts for?

Depreciation

Cash flows

Arbitrage

All revenue sources

True

False

Payback includes the time value of money by reducing cash flows by the discount rate.

Answer = FALSE

An organization’s strategic analysis of its strengths and weakness must include its finances.

Answer = TRUE

Why would a company want to have a low average payment period?

Answer = Indicates positive cash flow

A major difference between operating margin and net margin is that net margin accounts for?

Answer = Depreciation

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