According to the Textbook, a Problem Inherent in Using a Price/Cash

question 59

Multiple Choice

According to the textbook, a problem inherent in using a Price/Cash Flow ratio is that

• A)debt repayments are included, and you are trying to value only the stock of the company.
• B)cash flow is more difficult to calculate.
• C)cash flows can vary widely from one year to the next.
• D)depreciation and amortization expenses are not taken into account.

---

Definitions:

Reliability

The degree to which test scores are free from errors of measurement, also, the capacity of an instrument to provide consistent results. See “test-re-test,” “alternative forms,” and “internal consistency”.

Validity

The degree to which all of the accumulated evidence supports the intended interpretation of test scores for the intended purpose. Validity is a unitary concept that attempts to answer the question: How well does a test measure what it’s supposed to measure?

Guilford's Cognitive

Refers to a model developed by psychologist Joy Paul Guilford that categorizes human intelligence into operations, contents, and products.

Functions

In mathematics, functions are defined as relationships between a set of inputs and a set of permissible outputs, where each input is related to exactly one output.