A Reason That a Small Firm Would Not Use a Discounted

question 12

Multiple Choice

A reason that a small firm would not use a discounted cash flow technique in evaluating capital investments would be that

• A) the accounting rate of return is better for a small firm.
• B) liquidity is less of an issue for a small company.
• C) small firms invest more in short-term assets than do large companies.
• D) nonfinancial issues may be more important for a small firm.

---

Definitions:

NASDAQ

is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks.

Chief Financial Officer

The executive responsible for managing a company's financial planning, risk management, and financial reporting.

Corporate Treasurer

An executive responsible for overseeing the company's capital structure, managing financing activities, investment, and risks, ensuring the company's financial health and liquidity.

Vice President

A senior management position in a company or organization, reporting directly to the President or CEO, responsible for a specific division or function.