Which of These Is the Process of Estimating Expected Future

question 52

Multiple Choice

Which of these is the process of estimating expected future cash flows of a project using only the relevant parts of the balance sheet and income statements?

• A) Incremental cash flows
• B) Cash flow analysis
• C) Pro forma analysis
• D) Substitutionary analysis

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Definitions:

Market Wage

The prevailing rate of pay for labor in a particular job market, determined by the supply and demand for labor in that market.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate in a given period of time.

Maximize Profits

The process by which a firm chooses its production level and pricing strategy to earn the highest possible profit based on its costs and market demand.

Productivity

An indicator of production effectiveness typically expressed as the proportion of products generated to the resources used in creating them.