Assume in Analyzing Alternative Proposals That Proposal F Has a Useful

question 110

Multiple Choice

Assume in analyzing alternative proposals that Proposal F has a useful life of 6 years and Proposal J has a useful life of 9 years. What is one widely used method to make the net present values of the proposals comparable?

• A)Ignore the fact that Proposal F has a useful life of 6 years and treat it as if it has a useful life of 9 years.
• B)Adjust the life of Proposal J to a time period that is equal to that of Proposal F by estimating a residual value at the end of year 6.
• C)Ignore the useful lives of 6 and 9 years and find an average (7 1/2 years).
• D)Ignore the useful lives of 6 and 9 years and compute the average rate of return.

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Definitions:

Repeated Practice

The act of performing or practicing a task or skill over and over again for the purpose of improving or mastering it.

Long-Term Retention

The ability to store and recall information over extended periods of time.

Cognitive

Relating to the mental processes involved in acquiring knowledge and comprehension, including thinking, knowing, remembering, and problem-solving.

Structuralists

Scholars who analyze societal structures and elements to understand cultural and social phenomena.