The Present Value of the Anticipated Future Stream of Cash

question 93

Multiple Choice

The present value of the anticipated future stream of cash flows from the business plus the value of the company if liquidated is referred to as

• A) return on assets.
• B) ROVA.
• C) earnings per share.
• D) shareholder value.
• E) ROI.

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Definitions:

Weighted-Average Cost Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighted by the quantity of goods.

LIFO

Last In, First Out is a method of valuing inventory where the items that were most recently produced or purchased are the first ones to be used in the calculation of cost of goods sold.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis, such as monthly or yearly, rather than continuously.

Average-Cost Method

An inventory valuation method that calculates stock value based on the average cost of goods available for sale during the period.