Indicate Whether Each of the Following Statements Is True or False

question 112

Short Answer

Indicate whether each of the following statements is true or false.
When unequal cash inflows are expected from a capital investment,the payback period can be calculated by accumulating incremental cash inflows or by using average annual cash inflows.______
The unadjusted rate of return is also called the simple rate of return.______
The unadjusted rate of return can be calculated as average increase in cash inflows divided by net cost of the original investment.______
The unadjusted rate of return does not take the time value of money into account.______
The unadjusted rate of return should be calculated using the initial cost of the investment,rather than the average invested capital.______

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Definitions:

Rule 10b-5

A rule under the U.S. Securities Exchange Act of 1934 addressing fraud and misrepresentation in securities transactions.

Fraud

An intentional deception that causes harm to another.

Material Omission

The failure to disclose important information intentionally or unintentionally, which if known, could influence the decision-making of a party relying on the information.

Securities Transaction

The process of buying, selling, or trading securities, such as stocks or bonds, in financial markets.