Which of the Following Is NOT an Advantage of Postaudits

question 35

Multiple Choice

Which of the following is NOT an advantage of postaudits?

• A)They evaluate profitability rather than cash flows.
• B)They may point to the need for additional funding for the project.
• C)They tend to hold managers accountable for capital investment decision making.
• D)The assumptions driving the original analysis may be invalidated by changes in the actual operating environment.

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Definitions:

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) every year until its maturity, at which point the principal is repaid.

Market Interest Rate

The prevailing rate of interest for securities and loans across the market, which can fluctuate based on supply and demand.

Interest Payment

The payment made to a lender by a borrower for the privilege of borrowing money, typically expressed as an annual rate.

Zero-Coupon Bond

A Zero-Coupon Bond is a debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.