Which of the Following Is a Basic Principle When Estimating

question 5

Multiple Choice

Which of the following is a basic principle when estimating a project's cash flows?

• A)cash flows should be measured on a pretax basis
• B)cash flows should ignore depreciation because it is a non-cash charge
• C)only direct effects of a project should be included in cash flow calculations
• D)cash flows should be measured on an incremental basis

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Definitions:

Observed Values

The actual values that are measured or collected during an experiment or survey.

Predicted Values

In statistics, these are the estimated outcomes based on a regression model or other predictive model.

Coefficient of Determination

A statistical measure represented by R² that assesses the extent of variance in a dependent variable that is predictable from the independent variable(s).

Regression Model

A statistical framework that predicts the connection between a dependent variable and one or several independent variables.