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Using a Reasonable and Realistic Estimate of Life Expectancy of a Capital

question 46

Short Answer

Using a reasonable and realistic estimate of life expectancy of a capital expenditure is important because: a. Too low of an estimate understates the profitability of the investment.
B) Too high of an estimate could lead to a wasteful use of scarce capital.
C) A profitable opportunity could be rejected if the life expectancy is not reasonable or realistic.
D) Both A and
B) e. A, B and
C)

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Definitions:

Private

Pertaining to or concerning individuals or organizations not affiliated with or controlled by the government or public sectors.

3PL Distribution

The use of third-party logistics providers to outsource elements of a company's distribution, warehousing, and fulfillment services.

Specialty Items

Products or goods that are distinctive due to their unique qualities, often catering to a niche market.

Distribution Center

A warehouse or large facility used for storing goods before they are distributed to retailers, wholesalers, or directly to consumers.

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