If the Capital Budgeting Decision Includes a Replacement Analysis, Then

question 75

Multiple Choice

If the capital budgeting decision includes a replacement analysis, then

• A) a gain from the sale of the old asset will represent a tax savings inflow.
• B) only incremental cash flows should be looked at.
• C) the sale price and tax savings will increase the cash inflows throughout the asset's life.
• D) two of the other answers are correct

---

Definitions:

Operant Model

A theory of learning that emphasizes the role of rewards and punishments in shaping behavior.

Latency Stage

A phase in Freudian psychosexual development occurring between ages 6 and puberty, characterized by a decrease in sexual urges and interests.

Psychosexual Stage

In psychoanalytic theory, one of the developmental phases during which the pleasure-seeking energies of the id focus on distinct erogenous zones.

Parsimonious Explanation

An explanation that requires the fewest possible assumptions, variables, or changes to adequately describe a phenomenon or solve a problem.