When Evaluating a New Project, Firms Should Include in the Projected

question 19

Multiple Choice

When evaluating a new project, firms should include in the projected cash flows all of the following EXCEPT:

• A) Changes in net working capital attributable to the project.
• B) Previous expenditures associated with a market test to determine the feasibility of the project, provided those costs have been expensed for tax purposes.
• C) The value of a building owned by the firm that will be used for this project.
• D) A decline in the sales of an existing product, provided that decline is directly attributable to this project.
• E) The salvage value of assets used for the project that will be recovered at the end of the project's life.

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Definitions:

Cognitive Processes

The mental activities involved in acquiring, storing, retrieving, and using information, including perception, memory, and reasoning.

Psychometrics

The measurement of mental abilities, traits, and processes.

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The ability to identify your own and other people’s emotions accurately, express your emotions clearly, and regulate emotions in yourself and others.

Own Emotions

The personal experience and awareness of one's own feelings.