Which of the Following Situations Explains 'Ordering

question 47

Multiple Choice

Which of the following situations explains 'ordering'? 

• A) Ordering refers to the placing of purchase orders at a supplier against previously arranged conditions. 
• B) Ordering is when orders are placed directly at the supplier, without questioning the supplier's conditions. 
• C) Ordering refers to the placing of purchase orders at a supplier without previously arranged conditions. 
• D) Ordering is when orders are placed directly at the supplier and there is questioning of the supplier's conditions.

---

Definitions:

Discount Rate

The rate of interest that is utilized in a DCF analysis for calculating the current value of anticipated cash flows.

NPV

Net Present Value is a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows.

Contracts

Legal agreements between two or more parties that are enforceable by law, outlining responsibilities, duties, and sharing of benefits.

IRR

Internal Rate of Return; the discount rate that makes the net present value of all cash flows from a particular project zero.