Asked by Bridget Stokes on Jul 30, 2024
Verified
Cash Flow Over Life of Project Time Value of Money A) No Yes B) No No C) Yes No D) Yes Yes \begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Cash Flow Over } \\\text { Life of Project }\end{array} & \begin{array} { l } \text { Time Value of } \\\text { Money }\end{array} \\\hline \text { A) } & \text { No } & \text { Yes } \\\hline \text { B) } & \text { No } & \text { No } \\\hline \text { C) } & \text { Yes } & \text { No } \\\hline \text { D) } & \text { Yes } & \text { Yes } \\\hline\end{array} A) B) C) D) Cash Flow Over Life of Project No No Yes Yes Time Value of Money Yes No No Yes
A) choice A.
B) choice B.
C) choice C.
D) choice D.
Total Cost Approach
The total cost approach is an assessment method that considers all possible costs related to a product or project, including direct, indirect, fixed, and variable costs.
Discount Rate
The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
Salvage Value
The predicted remaining value of an asset at the termination of its functional life.
- Evaluate the effects of the timing of cash flows and the monetary value over time on investment choices.
Verified Answer
NM
Nikos MourisJul 30, 2024
Final Answer :
D
Explanation :
The total cost approach to capital budgeting analysis considers both the cash flow over the life of the project and the time value of money, making choice D correct.
Learning Objectives
- Evaluate the effects of the timing of cash flows and the monetary value over time on investment choices.