The Basic Capital Budgeting Decision Models, That Is, NPV and IRR

question 74

Multiple Choice

The basic capital budgeting decision models, that is, NPV and IRR, handle risk by

• A)ignoring it
• B)assuming all cash flows are known with certainty
• C)assuming all projects are of average risk and evaluating them based on expected values
• D)using risk-adjusted discount rates to evaluate projects

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Definitions:

Inhibited And Shy

Describes a personality trait where individuals show restraint in action or expression and often feel uncomfortable in social situations.

Personality Change

Alterations in an individual's character or behavior patterns, often due to developmental processes, experiences, or psychological interventions.

Adopted Children

Children who have been legally taken and raised by parents who are not their biological parents.

Emotional Reactivity

Refers to the intensity and speed of an individual's emotional response to a stimulus or situation.