Management Science Theory Focuses on the Use of Rigorous Quantitative

question 20

True/False

Management science theory focuses on the use of rigorous quantitative techniques.

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Definitions:

Capital Budgeting

The process by which investors and managers evaluate the profitability and financial viability of long-term investments and projects.

NPV

Net Present Value; a financial metric used to assess the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

IRR

Internal Rate of Return; the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero, used in capital budgeting to measure the profitability of an investment.

Cash Flows

The total amount of money being transferred into and out of a business, particularly affecting liquidity.