Which of the Following Is an Example of a Discretionary

question 74

Multiple Choice

Which of the following is an example of a discretionary fixed cost?

• A) depreciation of equipment
• B) advertising costs
• C) rental of machinery
• D) insurance on automobiles

Understand the implications of project risk on a firm's financial health and risk profile.

Recognize the value and types of real options in capital budgeting.

Understand how risk in cash flow estimation affects capital budgeting decisions.

Grasp the relevance of portfolio theory and other risk adjustment methods in capital budgeting.

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Definitions:

Center

The middle point of a shape or object, equidistant from all outer edges.

Radius

The distance from the center to any point on the circumference of a circle.

Center

A point of origin or midpoint around which a figure or object is symmetrically arranged or balanced.

Point

A precise location or position in a geometric space, not having any dimension.