When Using a Company's Current Earnings to Estimate Future Earnings

question 131

True/False

When using a company's current earnings to estimate future earnings performance,investors normally should exclude discontinued operations and extraordinary items.

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Definitions:

Consideration

Something of value exchanged between parties in a contract, making the agreement legal and binding.

Bargained-For Exchange

An element of contracts where both parties agree to provide something of value to the other.

Negotiation of Contracts

The process of discussing terms and details between parties in order to reach a mutual agreement before finalizing a contract.

Uniform Commercial Code

An extensive collection of regulations that oversee every commercial activity in the United States, designed to synchronize the legislation of sales and various commercial dealings throughout the states.