Cross-Sectional Ratio Analysis Is Used to

question 24

Multiple Choice

Cross-sectional ratio analysis is used to

• A) correct expected problems in operations.
• B) isolate the causes of problems.
• C) provide conclusive evidence of the existence of a problem.
• D) reflect the symptoms of a possible problem.

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Definitions:

Net Present Value (NPV)

The variance between the current value of incoming cash and the current value of outgoing cash throughout a specific duration.

Internal Rate of Return (IRR)

The discount rate that makes the net present value (NPV) of all cash flows from a particular project zero.

Net Present Value (NPV)

A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate, to determine the project’s profitability.

Internal Rate of Return (IRR)

A method of calculating an investment's rate of return that makes the net present value of all cash flows equal to zero.