Ratification of a Contract,once Effected,is Final and Cannot Be Withdrawn

question 6

True/False

Ratification of a contract,once effected,is final and cannot be withdrawn.

Apply the appropriate cost of capital for evaluating capital budgeting projects based on funding sources.

Recognize the bases for the component costs of capital.

Compare the cost of external equity with the cost of retained earnings and understand flotation costs.

Evaluate the conditions under which retained earnings should be considered the first source of capital.

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Definitions:

Plant Assets

Long-term tangible assets that are used in the operation of a business and are not intended for sale.

Transactions

The economic events of a business that are recorded by accountants.

Revenues and Expenses

Financial metrics reflecting the income earned from normal business operations and the costs incurred to generate that income, respectively.

Operating Activities

Business actions directly related to the production and delivery of goods and services, generating the company’s primary revenue.