A Contract Is Said to Be ________ When One or Both

question 59

Short Answer

A contract is said to be ________ when one or both parties have the option to void the contractual obligations.

Recognize the role of cash flow forecasting and its associated risks in project evaluation.

Understand the impact of operational changes on project cash flows and NPV.

Recognize that a positive base case NPV requires verification through additional risk and sensitivity analyses.

Understand the concept of break-even analysis in various forms (accounting, financial, cash).

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Definitions:

Internal Controls

Procedures and policies implemented within an organization to safeguard its assets, enhance the reliability of accounting records, and increase efficiency.

Effectiveness

A measure of the degree to which objectives are achieved and the extent to which targeted problems are solved, without necessarily considering the resources used.

Accounting Records

Documents and books that keep track of all financial transactions of a business or individual.

Internal Control

Procedures and processes implemented by a company to safeguard its assets, ensure financial reporting accuracy, and promote operational efficiency.