Which of the Following Results in an Encumbrance

question 1

Multiple Choice

Which of the following results in an encumbrance?

• A) Place a purchase order.
• B) Receive goods previously ordered.
• C) Receive an invoice on goods previously received.
• D) Payment of an invoice previously received.

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Definitions:

Capital Rationing

The process of selecting the most profitable projects to invest in when a company has limited resources or capital available.

Present Value

The present value of anticipated future cash flows or sums of money, calculated with a given rate of earnings.

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period, providing insight into its financial health and liquidity.

Internal Rate Of Return

The discount rate at which the net present value of all the cash flows from an investment equal zero.