The Factor Which Determines Whether or Not Goods Should Be

question 162

Multiple Choice

The factor which determines whether or not goods should be included in a physical count of inventory is

• A) physical possession.
• B) legal title.
• C) management's judgment.
• D) whether or not the purchase price has been paid.

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Definitions:

Present Value

A rephrased definition denoting the current value of a future amount of money discounted at a particular rate of return.

Internal Rate of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Average Rate of Return

A financial ratio that demonstrates the profitability of an investment by comparing the average annual profit to the initial investment cost.

Average Investment

Average investment refers to the mean value of the initial and final investment over a certain period, often used in calculating returns and payback periods.