Suppose You Used the PV Excel Function to Determine Whether

question 24

Multiple Choice

Suppose you used the PV Excel function to determine whether an investment now would create enough profits in the future to be wise and it showed the PV to be $1 million This investment is

• A)Wise
• B)Unwise
• C)Wise if you would have to invest less than $1 million to earn those profits and unwise otherwise.
• D)Wise if you would have to invest more than $1 million to earn those profits and unwise otherwise.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Average Sales Period

The average amount of time it takes for a company to sell its inventory, which can reflect its inventory management efficiency.

Liquidity

The ability of an entity to quickly convert its assets into cash or to pay off its current liabilities.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects money owed from its customers over a period.