Regarding the Net Present Value of a Replacement Decision,which of the Following

question 141

Multiple Choice

Regarding the net present value of a replacement decision,which of the following statements is false?

• A) The present value of the after-tax cost reduction benefits resulting from the new investment is treated as an inflow.
• B) The after-tax market value of the old equipment is treated as an inflow at t = 0 (initial investment outlay).
• C) The present value of depreciation expenses on the new equipment,multiplied by the tax rate,is treated as an inflow.
• D) Any loss on the sale of the old equipment is multiplied by the tax rate and is treated as an outflow at t = 0 (initial investment outlay).
• E) An increase in net working capital is treated as an outflow when the project begins (initial investment outlay)and as an inflow when the project ends (terminal cash flow).

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Definitions:

Angelman Syndrome

A genetic disorder causing developmental delays and neurological problems, often characterized by smiles, laughter, and an excitable demeanor.

Epigenetic Inheritance

Inheritance that involves changes in how a gene is expressed without any change in that gene’s nucleotide sequence.

Chromosome 15

A specific chromosome in humans that carries genetic information, including genes associated with various disorders and physical traits.

Repressible Genes

Genes that can be turned off by the products of other genes in response to certain conditions.