Which One of These Is Not a Characteristic of a Concentration

question 41

Multiple Choice

Which one of these is not a characteristic of a concentration system of collections?

• A) All surplus funds are electronically transferred to a centralized account.
• B) Check clearing times are increased.
• C) Customer payments are directed to a local collection center.
• D) Collection time is reduced.

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Definitions:

IRR

Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. It is used to evaluate the attractiveness of an investment or project.

Hard Capital Rationing

Hard capital rationing involves a situation where a company cannot access additional funds for investments at any cost due to external factors, such as market conditions or regulatory limits.

Discounted Payback

A capital budgeting method that calculates the time it takes to recoup an investment's initial costs, taking the time value of money into account.

Time Value of Money

The concept that money available at the present time is worth more than the same amount in the future due to its earning capacity.