A Method of Evaluation Which Ranks Projects of Unequal Lives

question 34

Multiple Choice

A method of evaluation which ranks projects of unequal lives by assuming that both 'chains' continue indefinitely is referred to as the:

• A)constant chain of replacement.
• B)lowest common multiple method.
• C)constant chain of replacement in perpetuity method.
• D)equivalent annual value method.

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Definitions:

Speculative Motive

The intention to hold cash or assets in anticipation of making profits from expected changes in their prices or exchange rates in the future.

Inflation

The pace at which the overall cost of goods and services increases, causing the value of money to decrease.

Money Supply

The total volume of economic monetary assets, such as cash, coins, and the balances in checking and savings accounts, at a specific period.

Currency

The system of money in general use in a specific country, consisting of banknotes and coins, that is accepted as a medium of exchange.