CVP Analysis Is Most Likely to Be Used for Which

question 12

Multiple Choice

CVP analysis is most likely to be used for which of the following decisions?

• A) The amount of discretionary expenditures for the next period
• B) The organizational vision
• C) The exact level of operations at which the organization will operate
• D) Whether to buy a business segment operating in Germany

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Definitions:

Estimated Value

An appraisal of the worth of something, such as an asset or a company, based on available data but subject to adjustments as more information becomes available.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from a country's central bank's discount window; also the rate used to discount future cash flows in discounted cash flow analysis.

Project Risk

The potential for losses or less-than-expected outcomes in a specific project, due to factors such as cost overruns, underperformance, or delays.

Funding Sources

Various origins of capital used to start or expand a business, including debt financing, equity financing, and internal funds.