Exam 22: Managing the Firms Assets

The question "How long will it take to recover the original investment outlay?" is answered using

The payback period technique measures how long it will take to recover the initial cash outlay and the total amount of interest unearned over the payback period as an opportunity cost.

Management of working capital focuses attention on

If the net present value of a proposed investment is negative,

The main purpose of capital budgeting is to help managers make decisions about

The cash conversion period is the time between

Net cash flow and net profit are

Discounted cash flow (DCF) techniques compare the present value of future cash flows with

Pledging accounts receivable may limit a firm's ability to borrow from a bank because this practice removes a prime asset from the firm's available collateral.

The measurement techniques mentioned in the textbook include all of the following except

List the three techniques for making capital budgeting decisions discussed in the chapter. Which incorporate the time value of money?

Net profit is the difference between cash inflows and outflows.

Long-term investments are the focus of

Accounting return on investment equals the average annual after-tax profits per year divided by the average book value of the investment.

The payback period technique measures how long it will take to recover the initial cash outlay of an investment.

In a healthy business, cash flow is typically even.

Under the NPV method, the rate of return required to satisfy the firm's investors is

Use of the accounting return on investment technique answers the question, "How long will it take to recover the original investment outlay?"

Working-capital management

Jack should use ____ to answer the question "How does the present value of future benefits from the investment compare to the initial investment outlay?"