When Considering the Results of a Proposed Investment Determined by Present

question 76

Multiple Choice

When considering the results of a proposed investment determined by present value analysis which indicates that the proposal has a rate of return greater than the cost of capital, the investment might not be made because:

• A)the quantitative analysis indicates that it should not be made.
• B)management's assessment of qualitative factors overrides the quantitative analysis.
• C)the timing of the cash flows of the investment will not be as assumed in the present value calculation.
• D)post-audits of prior investments have revealed that cash flow estimates were consistently higher than actual cash flows realized.

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Definitions:

Hardy-Weinberg Equilibrium

A principle stating that genetic variation in a population will remain constant from one generation to the next in the absence of disturbing factors.

Homozygous Recessive

An individual that has inherited two identical alleles for a particular trait from each parent, manifesting a trait that is only expressed when dominant alleles are absent.

Sterile Offspring

Individuals that are unable to reproduce due to genetic or physical abnormalities.

Natural Selection

The process by which organisms better adapted to their environment tend to survive and produce more offspring, driving evolution.