When Accounting Information Has the Potential to Change Decision-Making It

question 47

Multiple Choice

When accounting information has the potential to change decision-making it is said to be:

• A)consistent.
• B)understandable.
• C)material.
• D)comparable.

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Definitions:

Maximize

To increase a particular outcome or variable to its highest possible value within a given set of constraints.

NPV

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

Cost of Capital

The essential return rate an enterprise must attain on projects to uphold its market value and pull in investment.

Present Values

The current value of a future amount of money or stream of cash flows given a specified rate of return.