The Use of Present Value Calculations in Valuing Natural Resources

question 121

Multiple Choice

The use of present value calculations in valuing natural resources is important because it

• A) ensures that net benefits are minimized over time.
• B) permits greater extraction of resources in the future.
• C) permits greater extraction of resources in the present.
• D) ensures resources are allocated to their best use over time.

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Definitions:

Flexible Budget

A budget designed to change in response to variations in volume or activity levels.

Food

A substance consumed by living organisms to provide nutritional support, primarily obtained through plants, animals, or fermentation.

Supplies

Items used in the operation of a business or manufacturing process, which are not directly associated with the products being made.

Net Operating Income

The financial metric that calculates a company's profitability from its normal business operations, deducting operating expenses from the revenue.