The Net Present Value (NPV) Model of a Capital Budgeting

question 49

Multiple Choice

The net present value (NPV) model of a capital budgeting project is not affected by the

• A) Amount of depreciation expense allowed on the project for income tax purposes.
• B) Method of funding the cost of the project.
• C) Amount of net working capital needed for operations during the life of the project.
• D) Estimated salvage value of the project at the end of the project's useful life.
• E) Initial cost of the project.

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Definitions:

Encoding

The initial learning of information; transforming sensory input into a form that is memorable in the brain.

Intermediate

Positioned between two extremes or in the middle of a range, often referring to a level of skill, difficulty, or complexity that is not basic but not advanced either.

Impersonal

Lacking personal interest, attachment, or warmth; not relating to or influenced by personal feelings.

Sustained Attention

The ability to maintain attention to a selected stimulus for a prolonged period of time.