To Evaluate a Capital Budgeting Decision, It Is Sufficient to Determine

question 40

True/False

To evaluate a capital budgeting decision, it is sufficient to determine its consequences for the firm's earnings.

---

Definitions:

Net Profit Margin

A profitability ratio calculated by dividing net income by revenue, expressing how much profit a company makes for every dollar of sales.

Gross Profit Percentage

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold (COGS), expressed as a percentage.

Net Profit Margin

Net profit margin is a financial ratio that shows what percentage of a company's revenues remain as net income after all expenses are deducted.

Earnings Per Share

A financial ratio that measures the portion of a company’s profit allocated to each outstanding share of common stock, indicating company profitability.