When Creating a Selection Model, It Is Important to

question 34

Multiple Choice

When creating a selection model, it is important to

• A) make it mathematically complex so it cannot be "gamed".
• B) not use it as the final determination for project selection.
• C) assure the objectivity of the model.
• D) make certain the units used in the model are not inconsistent.
• E) keep it secret from those submitting project proposals.

Analyze and compare financial statements using common-sized financial statements and ratio analysis.

Understand the presentation and significance of accumulated other comprehensive income within financial statements.

Comprehend the significance of inventory turnover and days’ sales in inventory as measures of efficiency and liquidity.

Appreciate the utility of financial analysis tools in making comparative evaluations across companies or time periods.

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Definitions:

Accounting Numbers

Figures that represent the financial performance and position of a company, including income, expenses, assets, and liabilities.

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide companies in preparing financial statements on a global basis.

U.S.GAAP

United States Generally Accepted Accounting Principles, which are accounting standards used in the U.S. to prepare, present, and report financial statements.

Profitability

A rephrasing of profitability analysis, it refers to a company's ability to generate profit from its operations relative to its costs.