For Each Ratio Listed, Identify Whether the Change in Ratio

question 188

Short Answer

For each ratio listed, identify whether the change in ratio value from 2016 to 2017 is usually regards as favorable (F) or unfavorable (U).

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Definitions:

Present Value

The present value of a future amount of money or a series of cash flows, discounted by a certain rate of return.

Net Present Value Rule

A principle that states an investment should be made if the net present value of its cash flows, discounted at the hurdle rate, is positive.

Invest

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.