The Reflects the Opportunity Costs of Spending Funds Now Versus

question 6

Multiple Choice

The reflects the opportunity costs of spending funds now versus achieving a return through another investment, as well as the risks associated with not receiving returns until a later time.

• A) modified internal rate of return
• B) payback period
• C) accounting rate of return
• D) discount rate

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Definitions:

Short-swing Profits

Profits earned by corporate insiders from the purchase and sale, or sale and purchase, of company stock within a six-month period, which are subject to recovery by the corporation under specific regulations.

Tippees

Individuals who receive confidential information about a company and use it for stock trading, often illegally.

Corporate Insiders

Individuals within an organization, such as directors, officers, or major shareholders, who have access to private information about the company.

Sarbanes-Oxley Act

A U.S. federal law established to protect investors from fraudulent financial reporting by corporations.