Glossary

ABC inventory system

Inventory management technique that divides inventory into three groups—A, B, and C, in descending order of importance and level of monitoring—on the basis of the dollar investment in each. (Chapter 15)

ability to repay debt coverage ratios

Ratios that measure a firm’s ability to make required debt payments and to pay other fixed charges such as lease payments. (Chapter 3)

accept–reject approach

The evaluation of capital expenditure proposals to determine whether they meet the firm’s minimum acceptance criterion. (Chapter 10)

accounting exposure

The risk resulting from the effects of changes in foreign exchange rates on the translated value of a firm’s financial statement accounts denominated in a given foreign currency. ...

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