Which of the Following Resources Is a Firm's Resource Stock

question 46

Multiple Choice

Which of the following resources is a firm's resource stock?

• A) cash in the bank
• B) reputation for quality
• C) land and building
• D) plant and machinery

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Definitions:

NPV

Net Present Value; the calculation of the present value of cash inflows minus the present value of cash outflows over a period.

Cash Flows

The movement of money into and out of a business, representing its operating, investing, and financing activities.

WACC

Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted, including debt, equity, and any other long-term debt.

Reinvestment

The process of using dividends, interest, or any other form of income generated by an investment to purchase additional shares or units of that investment.