Cash Flows Occurring in Different Periods Should Not Be Compared

question 14

Multiple Choice

Cash flows occurring in different periods should not be compared unless:

• A) interest rates are expected to be stable.
• B) the flows occur no more than one year from each other.
• C) high rates of interest can be earned on the flows.
• D) the flows have been discounted to a common date.

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Definitions:

Registration Statement

A statement required by the Securities and Exchange Commission to indicate details about a business selling securities.

Cost of Repair Rule

A legal principle that allows a party suffering from property damage to recover the expenses necessary to restore the property to its pre-damage condition.

Negligent Credentialing

Occurs if a hospital has retained a physician that the governing body of the hospital knew or should have known was incompetent.

Actual Privity

A real or direct relationship between parties, especially in contracts, where both are expressly named and involved.