Which of the Following Do the Modernists Accept as the Best

question 31

Multiple Choice

Which of the following do the Modernists accept as the best measure of improving shareholder wealth?

• A) Return on equity > 0.
• B) Return on Capital Employed (ROCE) > 0.
• C) NPV > 0.
• D) Dividend payout > 0.
• E) Dividend yield > 0.

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Definitions:

Inventory Period

The average time it takes for a company to sell through its inventory, calculated by dividing the total inventory by the cost of goods sold and then multiplying by 365 days.

Accounts Payable Period

The average time it takes for a business to pay off its suppliers and vendors.

Liquidity Reserves

Liquid assets held by an entity as a buffer against future contingencies or unforeseen expenses.

Operating Cycle

The average period between purchasing or acquiring inventory and receiving cash from sales of the inventory, critical for managing company liquidity.