To Reflect Greater Uncertainty (Greater Risk)about a Future Cash Inflow,an

question 50

Multiple Choice

To reflect greater uncertainty (greater risk) about a future cash inflow,an analyst could

• A)increase the discount rate for the cash flow.
• B)decrease the discounting period for the cash flow.
• C)increase the expected value of the future cash flow before it is discounted.
• D)extend the acceptable length for the payback period.

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Definitions:

Income Statement

A financial statement that shows the company's revenues and expenses over a specific period, leading to its net income or loss.

Net Profit Margin Percentage

A financial metric indicating the percentage of revenue that remains as net income after all expenses are deducted.

Income Statement

A financial document that shows a company's income, expenses, and net profit over a specified period.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to shareholders versus reinvesting in itself.