Items Such as Market Knowledge, Effective Advertising Programs, Fundraising Capabilities

question 19

Multiple Choice

Items such as market knowledge, effective advertising programs, fundraising capabilities and trained staff are NOT regarded as assets because they:

• A) are monetary items;
• B) cannot be measured;
• C) are not controlled by the entity;
• D) are too difficult to manage.

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Definitions:

Present Values

The contemporary valuation of a forthcoming sum of money or cash flows, based on a given rate of return.

Cash Inflows

Money entering a business from various sources, including sales, financing, and investment income.

Cash Outflows

Expenditures or payments made by a business, leading to a decrease in cash assets, including operational costs, investments, and financing activities.

IRR

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculated as the rate of return that sets the net present value of all cash flows from a particular project equal to zero.