In Selecting Among Different Projects, the Time Value of Money

question 109

Multiple Choice

In selecting among different projects, the time value of money is considered for which of the following reasons?

• A) To perform a cost-benefit analysis II. To prioritize investments III. To predict cash flow IV. To reduce operating costs
• B) I, II, and III only
• C) I, II, III, and IV
• D) III and IV only
• E) I and II only

---

Definitions:

Trust Receipts

Trust receipts are documents that evidence the release of merchandise to a buyer in trust for the bank until the loan amount is paid.

Pledged Inventory

Inventory that has been used as collateral for a loan.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.

SEC Registration

The process of filing documents required by the Securities and Exchange Commission for new securities to be sold to the public.