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Developmental Costs Are Incurred After a System Is Implemented and Continue

question 15

True/False

Developmental costs are incurred after a system is implemented and continue while the system is in use.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return or discount rate.

Discounting

The process of determining the present value of future cash flows by applying a discount rate.

Compounding

The process in which the value of an investment increases because the earnings on an investment, both capital, and interest, earn interest as time passes.

Simple Interest

Interest calculated only on the principal amount of a loan or deposit, without compounding.

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