Post-Audits Create an Incentive for Managers to Make Accurate Estimates

question 117

True/False

Post-audits create an incentive for managers to make accurate estimates, since managers know that their results will be evaluated.

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Definitions:

Contribution Margin

The amount of revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.

Operating Costs

Expenses associated with the operation of a business, including costs of goods sold and administrative expenses.

Annual Cash Inflows

The total amount of money, often from sales, investments, or financing, that flows into a company over a year.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument, in order to determine its present value.