Many Companies Start with Cost to Determine Price Since Revenue

question 36

True/False

Many companies start with cost to determine price since revenue must cover cost for the firm to make a profit.

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Definitions:

Cash Flows

The full measure of financial transactions entering and leaving a business, essentially shaping its liquidity factor.

Discounted Cash Flow

An investment appraisal technique that values a project or an asset based on the present value of its expected future cash flows.

Valuation

The process of determining the present value of an asset or a company based on earnings, assets, and market comparisons.

Required Return

The minimum expected yield by investors to justify the risk of the investment.