Which of the Following Is Not a Relevant Item to Consider

question 9

Multiple Choice

Which of the following is not a relevant item to consider in cash flow estimation?

• A) A change in current assets invested in the project.
• B) A change in current liabilities to finance new inventories.
• C) Regular meeting fees for the board of directors incurred when the go-no go decision is made.
• D) Any net changes in working capital over the life of the investment.

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Definitions:

Present Value

The present worth of a future amount of money, or sequence of cash flows, taking into account a certain return rate, employed in discounting to evaluate investment prospects.

Interest Factor

A multiplier used to calculate the total interest that will accrue on an investment or loan based on the interest rate and time period.

Calculated

The result of mathematically determining a number or value through a prescribed process or formula.

Higher Risk

A condition or scenario involving a greater probability of loss or less certainty of returns, typically demanding a higher risk premium.