Is This Statement Correct? Solution: ROI Is a Principle That

question 41

Multiple Choice

Is this statement correct? Solution: ROI is a principle that states money today is worth more than the identical sum in the future.

• A) Yes
• B) No

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Definitions:

Short-Term Funds

Short-Term Funds are investment vehicles that invest in securities with short maturity periods, usually less than one year, providing liquidity and income.

Trade Credit

A type of commercial financing in which a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations to finance their immediate cash flow needs.

Spontaneous Financing

Refers to funding that occurs naturally as a firm's operations grow, such as trade credit that increases with sales.