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.

---

Definitions:

Salaries Payable

A liability account that records the amount of salaries due but not yet paid to employees.

Ceilings For Earnings

Limits set on the amount of income that can be considered for certain calculations, such as social security or pension benefits.

Defined Contribution

A type of retirement plan where the employer, employee, or both make contributions on a regular basis, but the final benefits received depend on the investment's performance.

Defined Benefit

A type of pension plan where the benefits that an employee will receive upon retirement are predefined based on factors like salary and tenure.