A Key to Estimating an Accurate Amount of Cash to Be

question 23

Multiple Choice

A key to estimating an accurate amount of cash to be collected from sales is:

• A) the accuracy of the sales forecast.
• B) the accuracy of the estimated collection patterns for sales.
• C) both a and b are keys.
• D)neither a nor b are keys.

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Definitions:

CAPM

The Capital Asset Pricing Model, a model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Betas

A measure of the volatility, or systematic risk, of a security or portfolio compared to the market as a whole.

Future Volatility

The degree of variation of trading prices over time, typically measured by the standard deviation of returns, predicting the range of potential movements of an asset's price.

Rates of Return

The gains or losses of an investment over a specified period, expressed as a percentage of the investment's initial cost.