Raw Materials Are Different from Other Business Products,in That

question 158

Multiple Choice

Raw materials are different from other business products,in that

• A)buyers of raw materials do not seek sources of supply.
• B)raw materials require grading.
• C)raw materials require a lot of handling before moving to the next production process.
• D)raw materials never involve contract production arrangements.
• E)pricing decisions for farm products are more complicated.

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Definitions:

Cost of Equity Financing

This represents the return a company must offer investors to entice investment, effectively the cost of new equity capital.

Required Rate of Return

The least percentage of yearly return needed to entice entities or individuals to invest in a particular project or security.

Average IRR

The mean internal rate of return, calculating the average profitability of investments or projects over time.

Pre-Tax Cost

The expense incurred by an organization or individual before taxes have been deducted.