Important Points to Remember While Estimating Cash Flows of Projects

question 77

Multiple Choice

Important points to remember while estimating cash flows of projects are:
I. only cash flow is relevant
II. always estimate cash flows on an incremental basis
III. be consistent in the treatment of inflation

• A) I only
• B) I and II only
• C) II, and III only
• D) I,II, and III

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Definitions:

Temporarily Operating

A status of business or facility operation for a limited period or until a specific event occurs, often used in contexts of transitional management or during emergencies.

Production Possibilities Curve

The Production Possibilities Curve is a graph that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed.

Economic Growth

The escalation in the real value of products and services an economy produces, adjusted for inflation, over time.

Outward Shift

Refers to an expansion in an economy's production possibility frontier, indicating an increase in the ability to produce goods and services.