Since Value Is Based on Discounted Cash Flows,a Company or an Investor

question 18

True/False

Since value is based on discounted cash flows,a company or an investor need not analyze growth and return on invested capital (ROIC).

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Definitions:

Ending Inventory

The value of goods that remain unsold at the end of an accounting period.

Cost Flow Assumption

An accounting method used to value inventory and determine the cost of goods sold, such as FIFO (First In, First Out) or LIFO (Last In, First Out).

LIFO

"Last In, First Out" method of inventory valuation where the most recently produced items are recorded as sold first.

FIFO

First In, First Out, an inventory valuation method where goods purchased or produced first are sold or consumed first.