The Two Cardinal Rules Which Financial Analysts Follow to Avoid

question 8

True/False

The two cardinal rules which financial analysts follow to avoid capital budgeting errors are: (1) capital budgeting decisions must be based on accounting income, and (2) only incremental cash flows are relevant to accept/reject decisions.

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Definitions:

Panic Disorder

A psychiatric disorder characterized by recurrent unexpected panic attacks—sudden periods of intense fear or discomfort.

Generalised Anxiety Disorder

A persistent condition marked by prolonged anxiety and concern over general life events, items, and circumstances without specific reasons.

Phobic Disorder

A type of anxiety disorder characterized by an excessive and irrational fear response to a specific object, situation, or activity, leading to avoidance behavior.

Dissociative Identity Disorder

A psychological condition characterized by the presence of two or more distinct personality states within a single individual.