Capital Budgeting Methods Rely on Measures of Cash Flows into and Out

question 156

Short Answer

Capital budgeting methods rely on measures of cash flows into and out of the firm;capital projects ________ those cash flows.

---

Definitions:

Fairly Priced

A term indicating that an asset's selling price is considered to be in line with its intrinsic value.

Homogeneous Expectations

An assumption in finance that all investors have the same expectations regarding the future rates of return, volatilities, and correlations of securities.

Economic View

A perspective or analysis based on economic indicators, trends, and policies to understand or predict economic outcomes.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between the risk of an investment and its expected return.