In Capital Budgeting Terminology,an Externality Is Defined as Something That

question 27

True/False

In capital budgeting terminology,an externality is defined as something that is outside,or external to,a proposed new project.Therefore,externalities are not considered in project cash flow estimates.

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Definitions:

Cash Outlay

The actual amount of money spent or disbursed on goods, services, or assets.

Alternative Investments

Investments in asset classes other than stocks, bonds, and cash, including real estate, hedge funds, private equity, and commodities.

Discontinuing

The process of ending the manufacture, support, or offering of a product or service.

Allocated Fixed Costs

Fixed costs that are assigned or distributed to various departments, products, or activities based on specific criteria.