In Using a Systems Approach to Financial Planning, It Is

question 89

Multiple Choice

In using a systems approach to financial planning, it is necessary to develop a

• A) pro forma income statement.
• B) cash budget.
• C) production plan.
• D) All of the options are true.

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Definitions:

Average Rate of Return

A financial ratio showing the average annual return of an investment over its lifetime, calculated as the total expected return divided by the initial cost of the investment.

Total Income

The sum of all revenue and gains for an entity over a specified period of time.

Present Value

The present value of a future amount of money or a series of future cash flows, discounted at a specific rate of return.

Internal Rate of Return

The discount rate that makes the net present value of all cash flows from a particular project equal to zero.