When Management Is Unable to Predict Future Cash Flows with Certainty

question 106

True/False

When management is unable to predict future cash flows with certainty they will reduce the required internal rate of return below the business's cost of capital.

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Definitions:

Implied Ratification

The acceptance or approval of a previously unauthorized act by behaving in a manner that acknowledges the act as authorized.

Express Ratification

Formal approval or confirmation of an act or agreement, usually explicitly and often in writing, making it officially valid.

Misrepresentation

The act of giving a false or misleading statement about a material fact, often leading to a breach of contract.

Disaffirm

To legally reject or void a previously agreed upon contract or agreement, especially by minors.