Which of the Following Options Is Not a Factor Which

question 9

Multiple Choice

Which of the following options is not a factor which might a company might want to consider before making a decision on potential projects?

• A) Level of uncertainty regarding cash flows
• B) The ability to service interest payments
• C) General liquidity of the company
• D) That the project can go ahead without needing to borrow money

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Definitions:

Current Liabilities

Short-term financial obligations of a company that are due to be paid within one year.

Retained Earnings

The portion of net income which is retained by the corporation rather than distributed to its owners as dividends.

COGS

Cost of Goods Sold (COGS) refers to the direct costs associated with the production of goods sold by a company, including material and labor costs.

Gross Margin

Revenue less cost where cost is spending closely associated with production. Stated in dollars or as a percent of revenue. A fundamental measure of a business’s strength.