Which of the Following Is True

question 40

Multiple Choice

Which of the following is true?

• A) Some countries may prohibit netting.
• B) Some countries may prohibit forms of leading and lagging.
• C) Some countries may prohibit netting AND some countries may prohibit forms of leading and lagging.
• D) None of these are correct.

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Definitions:

Initial Cost

The purchase price of a fixed asset plus all costs to obtain and ready it for use.

Cash Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, based on the cash inflows generated by the investment.

Net Cash Inflows

The difference between all cash received and all cash payments over a period, reflecting the net change in cash position.

Fixed Asset

Long-term tangible assets, such as machinery, buildings, and land, used in the operation of a business that are not expected to be consumed or converted into cash within a year.