Which One of the Following Terms Is Defined as the Management

question 9

Multiple Choice

Which one of the following terms is defined as the management of a firm's long-term investments?

• A) Working capital management
• B) Financial allocation
• C) Agency cost analysis
• D) Capital budgeting
• E) Capital structure

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Definitions:

Discount Factor

A multiplier used in discounted cash flow analysis to present value future cash flows.

Discount Rate

In finance, the interest rate used to discount future cash flows to their present value, often reflecting the risk or time value of money.

Opportunity Cost

The cost of missing out on the next best alternative when making a decision.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.