Management's Discussion and Analysis

question 63

Multiple Choice

Management's Discussion and Analysis

• A)is a report of the independent accountants.
• B)can be a substituted for the notes to the financial statements.
• C)provides a discussion and explanation of various items reported in the financial statements.
• D)provides assurances that the auditors are responsible for the financial statements.

---

Definitions:

Straight-line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal yearly amounts.

Net Income

The comprehensive earnings of a corporation after expenses and taxes have been taken away from its revenues.

Discount Rate

A rate used to determine the present value of future cash flows, reflecting the time value of money and risk of the cash flows.

Profitability Index

A calculation that determines the relative profitability of an investment, indicating the value created per unit of investment.