Norah Is Interested in Developing Her Payables Policy

question 22

Multiple Choice

Norah is interested in developing her payables policy.She wants to make a policy for which of the following?

• A)the process and timing in which obligations to pay for goods and services received by the business will be paid
• B)the price and timing of raw materials,and other goods and services necessary to build,sell,and support products
• C)how pricing will be determined for her products and services
• D)the process and timing in which obligations to pay for products and services sold will be billed and collected

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Definitions:

Net Present Value

A calculation used to determine the present value of a series of future cash flows minus the initial investment, often used in capital budgeting.

Return on Investment

A financial metric used to evaluate the efficiency of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Present Value of An Annuity

The current worth of a series of future payments or receipts, discounted at a specific interest rate.

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account to analyze the profitability of investments.