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The Following Are Definitions of Terms Related to Audit Sampling

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The following are definitions of terms related to audit sampling.Indicate,using the correct letter,which term is most closely associated with the definition.Each term is associated with only one definition. The following are definitions of terms related to audit sampling.Indicate,using the correct letter,which term is most closely associated with the definition.Each term is associated with only one definition.


Definitions:

Payback Cutoff

The maximum allowable period for an investment to recoup its initial cost, beyond which it is not considered.

NPV

Net Present Value; a calculation used to determine the present value of a series of future cash flows, less the initial investment.

Conventional Cash Flow

A pattern of cash flow over time where an initial outlay is followed by a series of positive cash inflows.

Cash Flows

The entirety of cash and cash-equivalent assets being moved into and exiting a company.

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