Accounting 202 Exam 4 Questions and
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Internal Cash Flow - any cash of Borrower and its Restricted
Subsidiaries that is not generated from a sale or disposition of assets
outside the ordinary course of business, a casualty or condemnation event,
an incurre...
Internal Cash Flow - ✔✔any cash of Borrower and its Restricted
Subsidiaries that is not generated from a sale or disposition of assets
outside the ordinary course of business, a casualty or condemnation event,
an incurrence of Indebtedness or an issuance of Equity Interests.
Future Cash Flow - ✔✔a method of discounting cash that you expect to
receive in the future to the value at the current time
Profitability Index - ✔✔a measure of a project's or investment's
attractiveness. The PI is calculated by dividing the present value of future
expected cash flows by the initial investment amount in the project.
Internal Rate of Return - ✔✔The discount rate at which the net present
value of an investment project is zero; the rate of return of a project over its
useful life.
Working Capital - ✔✔Current assets less current liabilities.
, Capital Budgeting - ✔✔The process of planning significant investments in
projects that have long-term implications such as the purchase of new
equipment or the introduction of a new product.
Debt-to-equity Ratio - ✔✔used to evaluate a company's financial leverage
and is calculated by dividing a company's total liabilities by its shareholder
equity
Current Ratio - ✔✔A company's current assets divided by its current
liabilities
Acid-test Ratio - ✔✔a more rigorous test of a company's ability to meet its
short-term debts than the current ratio. Inventories and prepaid expenses
are excluded from total current assets, leaving only the more liquid (or
"quick") assets to be divided by current liabilities
Quick Ratio - ✔✔measures a company's capacity to pay its current
liabilities without needing to sell its inventory or obtain additional financing
Payback period - ✔✔The length of time that it takes for a project to fully
recover its initial cost out of the net cash inflows that it generates.
Earnings per share - ✔✔Computed by dividing net income by the average
number of common shares outstanding during the year
Price-earnings ratio - ✔✔tells investors how much a company is worth
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