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TABLE 10-5
To test the effectiveness of a business school preparation course, 8 students took a general business test before and after the course. The results are given below.
Exam Score Exam Score
Student Before Course (1) After Course (2)
1 530 670
2 690 770
3 910 1,000
4 700 710
5 450 550
6 820 870
7 820 770
8 630 610
-Referring to Table 10-5, the number of degrees of freedom is
Cash Flows
The movement of money into and out of a business, used to assess the company's liquidity, financial health, and profitability over time.
Net Income
The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue; also known as net earnings or net profit.
Net Present Value
A method used in capital budgeting to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.
Internal Rate of Return
A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.
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