The Present Value of the Expected Net Cash Inflows for a Project

question 65

Multiple Choice

The present value of the expected net cash inflows for a project will most likely exceed the present value of the expected net profit after tax for the same project because

• A) Income is reduced by taxes paid,but cash flow is not.
• B) There is a greater probability of realizing the projected cash flow than the forecasted income.
• C) Income is reduced by dividends paid,but cash flow is not.
• D) Income is reduced by depreciation charges,but cash flow is not.
• E) Cash flow reflects any change in net working capital,but sales do not.

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Definitions:

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MMPI

The Minnesota Multiphasic Personality Inventory, a comprehensive psychological test designed to assess a variety of personality traits and psychopathologies.

Naturalistic Observations

A research method in which subjects are observed in their natural environment without any manipulation by the observer.

Mental Representations

Mental representations are the cognitive structures in our minds that stand in for objects, events, or concepts, allowing us to understand and interact with the world around us.