Which of the Following Factors Should Be Included in the Cash

question 56

Multiple Choice

Which of the following factors should be included in the cash flows used to estimate a project's NPV?

• A) Interest on funds borrowed to help finance the project.
• B) The end-of-project recovery of any working capital required to operate the project.
• C) Cannibalization effects, but only if those effects increase the project's projected cash flows.
• D) Expenditures to date on research and development related to the project, provided those costs have already been expensed for tax purposes.
• E) All costs associated with the project that have been incurred prior to the time the analysis is being conducted.

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Definitions:

Variance

A measure of the dispersion or spread of a set of values, calculated as the average of the squared differences from the mean.

Index Fund

A financial instrument, either a mutual fund or exchange-traded fund, intended to mimic the results of a designated market index.

PHStat

A software tool that enhances Excel with statistical functions and procedures for analysis.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are from the mean.