Identifying Discontinued Items Is Important If a Potential Investor Is

question 56

True/False

Identifying discontinued items is important if a potential investor is going to use reported profit to estimate a company's value.

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Definitions:

Rate Of Return

The gain or loss of an investment over a certain period, expressed as a percentage of the investment's initial cost.

Npvgo

Net Present Value of Growth Opportunities; a measure evaluating the profitability of future investments by comparing their present value to the initial outlay.

Required Return

The minimum annual return rate that incites people or companies to allocate resources to a particular investment or project.

Constant Growth

A model in finance that assumes a stock’s dividends will continue to grow at a uniform rate indefinitely, used to estimate the stock's current value.