A Potential Future Negative Impact to Value And/or Cash Flows

question 74

Multiple Choice

A potential future negative impact to value and/or cash flows is often discussed in terms of probability of loss and the expected magnitude of the loss. This is called

• A) options.
• B) standard deviation.
• C) coefficient of variation.
• D) risk.

---

Definitions:

Credit Period

The amount of time the buyer is allowed in which to pay the seller.

Merchandise

Goods that are bought and sold in business transactions.

Invoice

The bill that the seller sends to the buyer.

Gross Profit

The financial metric that indicates the difference between revenue and the cost of goods sold (COGS), revealing how much a company earns from its core business activities.