With respect to currency measurement, what is the rule when discounting cash flows?
A) The revenues and expenses must be measured as they occur rather than on an incremental basis.
B) There is no need to incorporate the risk premium of that the firm's stockholders would demand in the discount rate.
C) Revenues and expenses should be measured on a pre-tax cash flow basis.
D) All cash flows should be measured in the same currency.
Answer: D
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Residual income indicates how ________.
A) efficiently a division uses its financial leverage to generate sales and thereby profits B) much operating income the division earns on every dollar of sales C) much return a division generates on average assets D) much extra operating income a division generates above the minimum acceptable le
There are products or services that can be either sold in a basic form or be processed further
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1) The fact that invested cash earns interest over time is called the time value of money. 2) The accounting rate of return is calculated by dividing the average annual operating income by the average amount invested. 3) An annuity is a stream of equal cash payments made at equal time intervals. 4) All else being equal, the shorter the investment period, the higher the total amount of interest earned. 5) Compound interest means that interest is calculated only on the principal amount.
Which of the following is an advantage of using single sourcing?
A) Suppliers are more likely to remain cost-competitive. B) Buyers are less reliant on one firm to deliver the needed goods without interruption. C) The buyer and seller agree to be each other's customers. D) Consistency of quality of materials input into the product process is greater. E) Buyers have other suppliers to fall back on if one supplier fails.