Evaluating a New Project, Firms Should Include in the Projected

question 49

Multiple Choice

evaluating a new project, firms should include in the projected cash flows all of the following EXCEPT:

• A)Changes in net working capital attributable to the project.
• B)Previous expenditures associated with a market test to determine the feasibility of the project, provided those costs have been expensed for tax purposes.
• C)The value of a building owned by the firm that will be used for this project.
• D)A decline in the sales of an existing product, provided that decline is directly attributable to this project.
• E)The salvage value of assets used for the project that will be recovered at the end of the project's life.

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Definitions:

Positive Reinforcement

A psychological concept involving the addition of a reward following a desired behavior, encouraging its future occurrence.

Behavior

The actions or reactions of an individual, often in relation to the environment or stimuli.

Convergence

The inward movement of the eyes as they focus on an object that is drawing nearer.

Visual Accommodation

The process by which the eye changes optical power to maintain a clear image or focus on an object as its distance changes.