The Basic Principle That Requires a Court to Follow a Previous

question 21

Multiple Choice

The basic principle that requires a court to follow a previous decision of a higher court when the current decision involves issues and facts similar to those involved in the previous decision is the doctrine of:

• A)precedent.
• B)concurrent jurisdiction.
• C)subject matter jurisdiction.
• D)stare decisis.
• E)none of the above

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Definitions:

Payback Period

Payback period is the amount of time it takes for an investment to generate an amount of cash flow equal to the original investment amount.

Net Cash Inflows

The amount of cash that a business receives over a period, minus the amount of cash outflows.

Inventory Cost

Inventory cost includes the costs associated with purchasing, storing, and managing goods that a business intends to sell; it typically comprises the purchase price, warehousing costs, and any other expenses related to holding inventory.

NPV Rule

The principle that an investment is considered acceptable if its net present value (NPV) is positive, under the context of discounted cash flow analysis.