The Current Account Balance Equals

question 142

Multiple Choice

The current account balance equals

• A) net exports + net transfers + net interest.
• B) net exports - net transfers + net interest.
• C) net exports + net transfers - net interest.
• D) net exports - net transfers - net interest.
• E) net exports + net transfers.

Appreciate the different approaches to capital budgeting preferred by firms of varied sizes.

Understand the concept and importance of capital rationing in project selection.

Calculate and interpret NPV (Net Present Value) for varying projects.

Calculate and interpret IRR (Internal Rate of Return) for different investments.

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Definitions:

Financial Slack

The availability of excess funds or resources in a company that allows for flexibility in operations, strategic investments, or weathering financial uncertainties without immediate financial stress.

Keynes

Refers to John Maynard Keynes, a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies of governments.

Transactions Reasons

The underlying motives or justifications for conducting financial transactions or business operations.

Opportunity Costs

The price paid for not selecting the immediate alternative choice during decision-making.